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

Warning Sign:

Beneish M-Score 1.49 higher than -2.22, which implies that it might have manipulated its financial results.

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 1.49 signals that the company is a manipulator.

AU' s 10-Year Beneish M-Score Range
Min: -4.61   Max: 12.97
Current: 1.49

-4.61
12.97

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 12.97. The lowest was -4.61. And the median was -2.43.


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 * 6.0432+0.528 * 0.9329+0.404 * 1.2419+0.892 * 0.9928+0.115 * 0.9174
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.4388+4.679 * -0.1682-0.327 * 1.0687
=1.49

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $312 Mil.
Revenue was 1325 + 1316 + 1324 + 1446 = $5,411 Mil.
Gross Profit was 273 + 252 + 296 + 404 = $1,225 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 $775 Mil.
Selling, General & Admin. Expense(SGA) was $105 Mil.
Total Current Liabilities was $1,005 Mil.
Long-Term Debt was $3,521 Mil.
Net Income was 41 + -80 + 39 + -305 = $-305 Mil.
Non Operating Income was 36 + -124 + -64 + 38 = $-114 Mil.
Cash Flow from Operations was 361 + 370 + 350 + 294 = $1,375 Mil.
Accounts Receivable was $52 Mil.
Revenue was 1340 + 1342 + 1463 + 1305 = $5,450 Mil.
Gross Profit was 276 + 330 + 434 + 111 = $1,151 Mil.
Total Current Assets was $2,564 Mil.
Total Assets was $10,770 Mil.
Property, Plant and Equipment(Net PPE) was $5,758 Mil.
Depreciation, Depletion and Amortization(DDA) was $835 Mil.
Selling, General & Admin. Expense(SGA) was $241 Mil.
Total Current Liabilities was $1,296 Mil.
Long-Term Debt was $3,603 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)
=(312 / 5411) / (52 / 5450)
=0.05766032 / 0.00954128
=6.0432

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)
=(252 / 5450) / (273 / 5411)
=0.21119266 / 0.22639069
=0.9329

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 - (1843 + 4839) / 9310) / (1 - (2564 + 5758) / 10770)
=0.28227712 / 0.22729805
=1.2419

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
=5411 / 5450
=0.9928

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))
=(835 / (835 + 5758)) / (775 / (775 + 4839))
=0.12664948 / 0.13804774
=0.9174

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)
=(105 / 5411) / (241 / 5450)
=0.01940492 / 0.04422018
=0.4388

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)
=((3521 + 1005) / 9310) / ((3603 + 1296) / 10770)
=0.48614393 / 0.45487465
=1.0687

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
=(-305 - -114 - 1375) / 9310
=-0.1682

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 1.49 signals that the company is likely to 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.65190.83960.38690.74880.92461.08850.86215.49271.38630.8834
GMI 1.01061.16130.74471.20120.93540.92010.84721.15381.09381.4416
AQI 1.15592.08930.48910.97650.69542.34780.68240.9991.1781.4501
SGI 1.2881.15531.09261.141.20521.06011.36621.2160.96180.8849
DEPI 1.05410.59411.05141.14330.88410.97981.0530.85781.15690.6813
SGAI 0.91411.10272.1160.88130.57241.58911.14020.58471.08830.7805
LVGI 0.83981.32621.0331.24670.88771.05240.71980.91041.1631.3694
TATA -0.0302-0.0379-0.0718-0.0513-0.04050.0182-0.0138-0.1384-0.1022-0.3763
M-score -1.62-2.31-3.84-2.77-2.62-1.88-2.481.36-2.57-4.16

Anglogold Ashanti Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.5540.58571.38631.69631.05240.62910.88344.54248.79176.0432
GMI 1.16321.55751.09381.3151.61991.58971.44261.32791.12190.9329
AQI 1.40711.06571.1781.15221.01631.35661.45011.12491.21561.2419
SGI 1.14861.06580.96180.88430.83390.80250.88490.89950.94170.9928
DEPI 0.88361.13221.15691.07080.85010.74550.68060.78771.03150.9174
SGAI 0.52940.16911.08830.95290.64152.8330.77670.73810.81130.4388
LVGI 0.96591.35211.1631.23961.50251.36171.36941.37831.08881.0687
TATA -0.1175-0.0805-0.1022-0.0933-0.3348-0.3438-0.3732-0.3735-0.1649-0.1682
M-score -2.98-2.82-2.57-2.21-3.93-4.61-4.14-0.944.021.49
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