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

Good Sign:

Piotroski F-Score of 7 is 7, 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 7 indicating the company's financial situation is typical for a stable company.

UNP' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 1088 + 1174 + 1151 + 1106 = $4,519 Mil.
Cash Flow from Operations was 1767 + 1942 + 1663 + 1694 = $7,066 Mil.
Revenue was 5638 + 5630 + 5573 + 5470 = $22,311 Mil.
Gross Profit was 3798 + 3829 + 3810 + 3720 = $15,157 Mil.
Total Assets at the begining of this year (Mar13) was $48,561 Mil.
Total Assets was $50,898 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $4,679 Mil.
Total Current Liabilities was $4,188 Mil.
Net Income was 957 + 1036 + 1042 + 1002 = $4,037 Mil.

Revenue was 5290 + 5250 + 5343 + 5221 = $21,104 Mil.
Gross Profit was 3520 + 3495 + 3621 + 3498 = $14,134 Mil.
Total Assets at the begining of last year (Mar12) was $45,336 Mil.
Total Assets was $48,561 Mil.
Long-Term Debt was $9,309 Mil.
Total Current Assets was $4,646 Mil.
Total Current Liabilities was $3,610 Mil.

Profitability

Q1. 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.

Union Pacific Corp's current net income was 4,519. ==> Positive ==> Score 1.

Q2. 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.

Union Pacific Corp's current cash flow from operations was 7,066. ==> 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/Total Assets at the beginning of this year (Mar13)
=4519/48561
=0.09305822

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=4037/45336
=0.08904623

Union Pacific Corp's return on assets of this year was 0.09305822. Union Pacific Corp's return on assets of last year was 0.08904623. ==> 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 was 4,519. Union Pacific Corp's current cash flow from operations was 7,066. ==> 7,066 > 4,519 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=0/50898
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=9309/48561
=0.19169704

Union Pacific Corp's gearing of this year was 0. Union Pacific Corp's gearing of last year was 0.19169704. ==> This year is lower. ==> Score 1.

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)=Total Current Assets/Total Current Liabilities
=4679/4188
=1.11723973

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=4646/3610
=1.28698061

Union Pacific Corp's current ratio of this year was 1.11723973. Union Pacific Corp's current ratio of last year was 1.28698061. ==> Last year's current ratio is higher ==> Score 0.

Q7. Change in Shares in Issue

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

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

Union Pacific Corp's number of shares in issue this year was 456.2. Union Pacific Corp's number of shares in issue last year was 470.5. ==> There is the same number of shares in issue this year, or fewer. ==> 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)=Gross Profit/Revenue
=15157/22311
=0.67935099

Gross Margin (Last Year)=Gross Profit/Revenue
=14134/21104
=0.66973086

Union Pacific Corp's gross margin of this year was 0.67935099. Union Pacific Corp's gross margin of last year was 0.66973086. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Mar13)
=22311/48561
=0.45944276

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=21104/45336
=0.46550203

Union Pacific Corp's asset turnover of this year was 0.45944276. Union Pacific Corp's asset turnover of last year was 0.46550203. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+0+1+1+0
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Union Pacific Corp has an F-score of 7 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 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 1111111111
Q4 1111111111
Q5 1111101111
Q6 0000111100
Q7 1111111111
Q8 0100001111
Q9 1111110010
F-score 7877878887
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