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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-3.53 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Anglogold Ashanti Ltd has a M-score of -3.57 suggests that the company is not a manipulator.

AU' s Beneish M-Score Range Over the Past 10 Years
Min: -4.24   Max: 4.17
Current: -3.53

-4.24
4.17

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 4.17. The lowest was -4.24. And the median was -2.50.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Anglogold Ashanti Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.7551+0.528 * 1.3195+0.404 * 0.8935+0.892 * 0.8616+0.115 * 0.8066
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9847+4.679 * -0.1794-0.327 * 1.0177
=-3.57

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $203 Mil.
Revenue was 945 + 1018 + 1079 + 1485 = $4,527 Mil.
Gross Profit was 115 + 188 + 209 + 269 = $781 Mil.
Total Current Assets was $1,717 Mil.
Total Assets was $7,426 Mil.
Property, Plant and Equipment(Net PPE) was $3,836 Mil.
Depreciation, Depletion and Amortization(DDA) was $790 Mil.
Selling, General & Admin. Expense(SGA) was $112 Mil.
Total Current Liabilities was $983 Mil.
Long-Term Debt was $2,691 Mil.
Net Income was -72 + -142 + -1 + -58 = $-273 Mil.
Non Operating Income was 128 + -13 + -26 + 70 = $159 Mil.
Cash Flow from Operations was 261 + 323 + 190 + 126 = $900 Mil.
Accounts Receivable was $312 Mil.
Revenue was 1254 + 1246 + 1308 + 1446 = $5,254 Mil.
Gross Profit was 255 + 241 + 296 + 404 = $1,196 Mil.
Total Current Assets was $1,843 Mil.
Total Assets was $9,310 Mil.
Property, Plant and Equipment(Net PPE) was $4,839 Mil.
Depreciation, Depletion and Amortization(DDA) was $773 Mil.
Selling, General & Admin. Expense(SGA) was $132 Mil.
Total Current Liabilities was $1,005 Mil.
Long-Term Debt was $3,521 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(203 / 4527) / (312 / 5254)
=0.04484206 / 0.05938333
=0.7551

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(188 / 5254) / (115 / 4527)
=0.22763609 / 0.17252043
=1.3195

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1717 + 3836) / 7426) / (1 - (1843 + 4839) / 9310)
=0.25222192 / 0.28227712
=0.8935

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=4527 / 5254
=0.8616

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(773 / (773 + 4839)) / (790 / (790 + 3836))
=0.13774056 / 0.17077389
=0.8066

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(112 / 4527) / (132 / 5254)
=0.02474045 / 0.02512372
=0.9847

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2691 + 983) / 7426) / ((3521 + 1005) / 9310)
=0.49474818 / 0.48614393
=1.0177

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-273 - 159 - 900) / 7426
=-0.1794

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Anglogold Ashanti Ltd has a M-score of -3.57 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Anglogold Ashanti Ltd Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.83960.38690.74880.92461.08850.86215.49271.12780.86520.8685
GMI 1.16130.70791.1380.95090.91750.85821.24741.09381.44161.2967
AQI 2.08930.48910.97650.69542.34780.68240.9991.1781.45011.0726
SGI 1.15531.09261.141.20521.06011.36621.2160.96180.88490.936
DEPI 0.59411.05141.14330.88410.97981.0530.85781.15690.68131.0229
SGAI 1.10272.1160.88130.57241.58911.14020.58471.16690.79680.5925
LVGI 1.32621.0331.24670.88771.05240.71980.91041.1631.36940.9749
TATA -0.0379-0.0718-0.0513-0.04050.0182-0.0138-0.1384-0.0954-0.3694-0.1304
M-score -2.31-3.85-2.81-2.61-1.88-2.471.41-2.79-4.14-3.00

Anglogold Ashanti Ltd Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.05240.62910.86524.55588.93336.22380.85870.74290.64210.7551
GMI 1.85052.31231.44261.27250.990.71251.28841.24911.19671.3195
AQI 1.01631.35661.45011.12491.21561.24191.07260.94370.80220.8935
SGI 0.83390.80250.88490.89690.92680.9640.94670.93160.90560.8616
DEPI 0.85010.74550.68060.78771.03270.91951.02510.94380.86720.8066
SGAI 0.72513.07990.79320.78730.88930.52260.63190.69630.90550.9847
LVGI 1.50251.36171.36941.37831.08881.06870.97491.00241.05491.0177
TATA -0.3263-0.3357-0.3663-0.3667-0.1538-0.1557-0.124-0.1187-0.138-0.1794
M-score -3.79-4.24-4.13-0.934.111.56-2.98-3.18-3.53-3.57
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