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AuRico Gold Inc (NYSE:AUQ)
Beneish M-Score
1.88 (As of Today)

Warning Sign:

Beneish M-Score 1.88 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.

AuRico Gold Inc has a M-score of 1.88 signals that the company is a manipulator.

AUQ' s 10-Year Beneish M-Score Range
Min: -10000000   Max: 42.71
Current: 1.88

-10000000
42.71

During the past 13 years, the highest Beneish M-Score of AuRico Gold Inc was 42.71. The lowest was -10000000.00. And the median was -2.02.


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 AuRico Gold Inc 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 * 0.6797+0.528 * 10.4238+0.404 * 0.9807+0.892 * 1.3912+0.115 * 0.3154
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5568+4.679 * -0.1046-0.327 * 1.5124
=1.88

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $57.2 Mil.
Revenue was 50.782 + 54.304 + 57.66 + 64.885 = $227.6 Mil.
Gross Profit was -37.105 + 19.083 + 3.04 + 24.16 = $9.2 Mil.
Total Current Assets was $291.9 Mil.
Total Assets was $2,462.4 Mil.
Property, Plant and Equipment(Net PPE) was $1,676.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $65.5 Mil.
Selling, General & Admin. Expense(SGA) was $27.7 Mil.
Total Current Liabilities was $114.2 Mil.
Long-Term Debt was $244.6 Mil.
Net Income was -106.412 + 14.859 + -103.491 + 18.274 = $-176.8 Mil.
Non Operating Income was 3.239 + 0.34 + 8.326 + 5.705 = $17.6 Mil.
Cash Flow from Operations was 11.954 + 24.338 + 13.875 + 13.099 = $63.3 Mil.
Accounts Receivable was $60.5 Mil.
Revenue was 63.119 + 39.772 + 27.458 + 33.273 = $163.6 Mil.
Gross Profit was 25.216 + 12.837 + 12.845 + 17.87 = $68.8 Mil.
Total Current Assets was $743.7 Mil.
Total Assets was $2,895.2 Mil.
Property, Plant and Equipment(Net PPE) was $1,558.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.7 Mil.
Selling, General & Admin. Expense(SGA) was $35.7 Mil.
Total Current Liabilities was $95.4 Mil.
Long-Term Debt was $183.5 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)
=(57.19 / 227.631) / (60.48 / 163.622)
=0.25123995 / 0.36963245
=0.6797

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)
=(19.083 / 163.622) / (-37.105 / 227.631)
=0.42028578 / 0.04031964
=10.4238

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 - (291.939 + 1675.955) / 2462.408) / (1 - (743.654 + 1558.706) / 2895.241)
=0.20082537 / 0.20477777
=0.9807

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
=227.631 / 163.622
=1.3912

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))
=(18.723 / (18.723 + 1558.706)) / (65.529 / (65.529 + 1675.955))
=0.01186931 / 0.03762825
=0.3154

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)
=(27.677 / 227.631) / (35.73 / 163.622)
=0.12158713 / 0.21836917
=0.5568

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)
=((244.607 + 114.159) / 2462.408) / ((183.532 + 95.381) / 2895.241)
=0.14569722 / 0.09633499
=1.5124

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
=(-176.77 - 17.61 - 63.266) / 2462.408
=-0.1046

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.

AuRico Gold Inc has a M-score of 1.88 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.

AuRico Gold Inc Annual Data

Jul05Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 110.14520.33620.81790.94351.237510.21860.48080.6797
GMI 112.443210.50260.09950.75361.33620.7841.180110.4238
AQI 10.77165.544417.90920.96410.99870.88260.3574.08561.06870.9807
SGI 00193.48192.36721.39760.97311.15220.35231.94951.3912
DEPI 0.30280.40690.03240.47661.1120.99010.869621.51360.28840.3154
SGAI 110.05290.35470.8871.25520.72822.34490.72310.5568
LVGI 0.30031.13431.16780.30421.37020.87941.06861.64570.66321.5124
TATA -0.0462-0.0332-0.006-0.0772-0.0438-0.0675-0.28410.04160.0145-0.1046
M-score 0.51-1.80175.993.05-3.06-3.05-3.538.67-1.841.88

AuRico Gold Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.68373.54357.346810.57668.43081.38660.97250.44440.57730.6797
GMI 0.77160.71950.74040.96141.1731.28581.4761.80591.526810.4238
AQI 8.31194.08564.23050.90530.98121.06871.23830.97810.97340.9807
SGI 1.20341.01580.80740.3860.45950.6760.95241.88561.84311.3912
DEPI 2.35968.369216.6152-39.149-19.15530.74130.2555-0.1085-0.14430.3154
SGAI 1.07910.99961.21442.10912.14561.69621.10430.62450.53030.5568
LVGI 0.72661.64571.72271.78262.05960.66320.67070.6740.65791.5124
TATA 0.04560.04170.05170.08020.03970.0230.0199-0.046-0.0542-0.1046
M-score 0.691.806.121.041.28-2.17-2.10-1.96-2.041.88
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