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GuruFocus has detected 3 Warning Signs with Anglogold Ashanti Ltd $AU.
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Anglogold Ashanti Ltd (NYSE:AU)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Anglogold Ashanti Ltd has an F-score of 4 indicating the company's financial situation is typical for a stable company.

AU' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 7
Current: 4

2
7

During the past 13 years, the highest Piotroski F-Score of Anglogold Ashanti Ltd was 7. The lowest was 2. And the median was 5.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Jun15) TTM:
Net Income was -72 + 130 + -78 + 0 = $-20 Mil.
Cash Flow from Operations was 261 + 375 + 223 + 0 = $859 Mil.
Revenue was 945 + 1020 + 940 + 0 = $2,905 Mil.
Gross Profit was 115 + 208 + 221 + 0 = $544 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Dec16) was
(8817 + 7426 + 7284 + 7433 + 7153) / 5 = $7622.6 Mil.
Total Assets at the begining of this year (Jun15) was $8,817 Mil.
Long-Term Debt was $2,144 Mil.
Total Current Assets was $1,166 Mil.
Total Current Liabilities was $760 Mil.
Net Income was 41 + -58 + -1 + -142 = $-160 Mil.

Revenue was 1254 + 1217 + 1079 + 1018 = $4,568 Mil.
Gross Profit was 255 + 219 + 209 + 188 = $871 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(9601 + 9310 + 9134 + 8853 + 8817) / 5 = $9143 Mil.
Total Assets at the begining of last year (Jun14) was $9,601 Mil.
Long-Term Debt was $3,651 Mil.
Total Current Assets was $2,400 Mil.
Total Current Liabilities was $872 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Anglogold Ashanti Ltd's current net income (TTM) was -20. ==> Negative ==> Score 0.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Anglogold Ashanti Ltd's current cash flow from operations (TTM) was 859. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

Anglogold Ashanti Ltd's return on assets of this year was -0.00226835. Anglogold Ashanti Ltd's return on assets of last year was -0.01666493. ==> This year is higher. ==> Score 1.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Anglogold Ashanti Ltd's current net income (TTM) was -20. Anglogold Ashanti Ltd's current cash flow from operations (TTM) was 859. ==> 859 > -20 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Dec16)=Long-Term Debt/Average Total Assets from Jun15 to Dec16
=2144/7622.6
=0.28126886

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=3651/9143
=0.39932189

Anglogold Ashanti Ltd's gearing of this year was 0.28126886. Anglogold Ashanti Ltd's gearing of last year was 0.39932189. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Dec16)=Total Current Assets/Total Current Liabilities
=1166/760
=1.53421053

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=2400/872
=2.75229358

Anglogold Ashanti Ltd's current ratio of this year was 1.53421053. Anglogold Ashanti Ltd's current ratio of last year was 2.75229358. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Anglogold Ashanti Ltd's number of shares in issue this year was 414.7. Anglogold Ashanti Ltd's number of shares in issue last year was 407.5. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=544/2905
=0.18726334

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=871/4568
=0.19067426

Anglogold Ashanti Ltd's gross margin of this year was 0.18726334. Anglogold Ashanti Ltd's gross margin of last year was 0.19067426. ==> Last year's gross margin is higher ==> Score 0.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Jun15)
=2905/8817
=0.32947715

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=4568/9601
=0.47578377

Anglogold Ashanti Ltd's asset turnover of this year was 0.32947715. Anglogold Ashanti Ltd's asset turnover of last year was 0.47578377. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+1+1+1+0+0+0+0
=4

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Anglogold Ashanti Ltd has an F-score of 4 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Anglogold Ashanti Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 0001110000
Question 2 1111111111
Question 3 0101100101
Question 4 1111111111
Question 5 1110110011
Question 6 0101101010
Question 7 0000010000
Question 8 1011000000
Question 9 1011100100
F-score 5557753444

Anglogold Ashanti Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Jun16Dec16
Question 1 0000000000
Question 2 1111111111
Question 3 0111110001
Question 4 1111111111
Question 5 0000001111
Question 6 1100110100
Question 7 0000001000
Question 8 0010000000
Question 9 0011100000
F-score 3454544434
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