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Union Pacific Corp (NYSE:UNP)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Union Pacific Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

UNP' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 8

3
9

During the past 13 years, the highest Piotroski F-Score of Union Pacific Corp was 9. The lowest was 3. And the median was 7.


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 own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 1174 + 1088 + 1291 + 1370 = $4,923 Mil.
Cash Flow from Operations was 1942 + 1767 + 1454 + 2137 = $7,300 Mil.
Revenue was 5630 + 5638 + 6015 + 6182 = $23,465 Mil.
Gross Profit was 3829 + 3798 + 4140 + 4340 = $16,107 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(48958 + 49731 + 50898 + 51562 + 52568) / 5 = $50,743 Mil.
Total Assets as of Sep13 was $48,958 Mil.
Long-Term Debt was $11,045 Mil.
Total Current Assets was $4,780 Mil.
Total Current Liabilities was $3,833 Mil.
Net Income was 1036 + 957 + 1106 + 1151 = $4,250 Mil.

Revenue was 5250 + 5290 + 5470 + 5573 = $21,583 Mil.
Gross Profit was 3495 + 3520 + 3720 + 3810 = $14,545 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(47070 + 47153 + 48561 + 49026 + 48958) / 5 = $48,154 Mil.
Total Assets as of Sep12 was $47,070 Mil.
Long-Term Debt was $8,764 Mil.
Total Current Assets was $4,064 Mil.
Total Current Liabilities was $3,655 Mil.

Profitability

Q1. Return on Assets (ROA)

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

Score 1 if positive, 0 if negative.

Union Pacific Corp's current net income (ttm) was 4,923. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

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

Score 1 if positive, 0 if negative.

Union Pacific Corp's current cash flow from operations (ttm) was 7,300. ==> Positive ==> Score 1.

Q3. 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.

ROA (This Year)=Net Income (TTM)/Beginning of This Year Total Assets (Sep13)
=4923/48958
=0.10055558

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Sep12)
=4250/47070
=0.09029106

Union Pacific Corp's return on assets of this year was 0.10055558. Union Pacific Corp's return on assets of last year was 0.09029106. ==> This year is higher. ==> Score 1.

Q4. 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.

Union Pacific Corp's current net income (ttm) was 4,923. Union Pacific Corp's current cash flow from operations (ttm) was 7,300. ==> 7,300 > 4,923 ==> CFROA > ROA ==> Score 1.

Funding

Q5. 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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=11045/50743.4
=0.21766377

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=8764/48153.6
=0.18200093

Union Pacific Corp's gearing of this year was 0.21766377. Union Pacific Corp's gearing of last year was 0.18200093. ==> Last year is lower than this year ==> Score 0.

Q6. 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: Sep14)=Total Current Assets/Total Current Liabilities
=4780/3833
=1.24706496

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=4064/3655
=1.1119015

Union Pacific Corp's current ratio of this year was 1.24706496. Union Pacific Corp's current ratio of last year was 1.1119015. ==> This year's current ratio is higher. ==> Score 1.

Q7. 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.

Union Pacific Corp's number of shares in issue this year was 896.9. Union Pacific Corp's number of shares in issue last year was 928.4. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Q8. 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
=16107/23465
=0.68642659

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=14545/21583
=0.67391002

Union Pacific Corp's gross margin of this year was 0.68642659. Union Pacific Corp's gross margin of last year was 0.67391002. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Sep13)
=23465/48958
=0.47928837

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Sep12)
=21583/47070
=0.45852985

Union Pacific Corp's asset turnover of this year was 0.47928837. Union Pacific Corp's asset turnover of last year was 0.45852985. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+1+1+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Union Pacific Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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, Altman Z-Score, Beneish M-Score


Historical Data

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

Union Pacific Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 0111101111
Q4 1111111111
Q5 1110001111
Q6 1001110010
Q7 1001111111
Q8 0011011011
Q9 1111101111
F-score 7678768798

Union Pacific Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 1111111111
Q4 1111111111
Q5 1110111100
Q6 0011110011
Q7 1111111111
Q8 0000111111
Q9 1111001011
F-score 7787888788
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