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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-3.10 (As of Today)

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.

Union Pacific Corp has a M-score of -3.10 suggests that the company is not a manipulator.

UNP' s Beneish M-Score Range Over the Past 10 Years
Min: -7.31   Max: 0.01
Current: -3.1

-7.31
0.01

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was 0.01. The lowest was -7.31. And the median was -2.65.


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 Union Pacific Corp 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 * 0.9906+0.528 * 0.9333+0.404 * 0.7315+0.892 * 0.931+0.115 * 0.9979
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1086+4.679 * -0.078-0.327 * 1.0716
=-3.10

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $1,508 Mil.
Revenue was 5562 + 5429 + 5614 + 0 = $16,605 Mil.
Gross Profit was 4489 + 4288 + 4096 + 0 = $12,873 Mil.
Total Current Assets was $3,942 Mil.
Total Assets was $53,763 Mil.
Property, Plant and Equipment(Net PPE) was $48,149 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,984 Mil.
Selling, General & Admin. Expense(SGA) was $4,555 Mil.
Total Current Liabilities was $3,508 Mil.
Long-Term Debt was $12,798 Mil.
Net Income was 1300 + 1204 + 1151 + 0 = $3,655 Mil.
Non Operating Income was 28 + 141 + 25 + 0 = $194 Mil.
Cash Flow from Operations was 1852 + 1709 + 2064 + 2027 = $7,652 Mil.
Accounts Receivable was $1,635 Mil.
Revenue was 6182 + 6015 + 5638 + 0 = $17,835 Mil.
Gross Profit was 4650 + 4456 + 3798 + 0 = $12,904 Mil.
Total Current Assets was $4,780 Mil.
Total Assets was $52,568 Mil.
Property, Plant and Equipment(Net PPE) was $45,553 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,873 Mil.
Selling, General & Admin. Expense(SGA) was $4,413 Mil.
Total Current Liabilities was $3,833 Mil.
Long-Term Debt was $11,045 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)
=(1508 / 16605) / (1635 / 17835)
=0.09081602 / 0.09167368
=0.9906

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)
=(4288 / 17835) / (4489 / 16605)
=0.72352117 / 0.77524842
=0.9333

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 - (3942 + 48149) / 53763) / (1 - (4780 + 45553) / 52568)
=0.03109946 / 0.04251636
=0.7315

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
=16605 / 17835
=0.931

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))
=(1873 / (1873 + 45553)) / (1984 / (1984 + 48149))
=0.03949311 / 0.03957473
=0.9979

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)
=(4555 / 16605) / (4413 / 17835)
=0.27431497 / 0.24743482
=1.1086

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)
=((12798 + 3508) / 53763) / ((11045 + 3833) / 52568)
=0.30329409 / 0.28302389
=1.0716

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
=(3655 - 194 - 7652) / 53763
=-0.078

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.

Union Pacific Corp has a M-score of -3.10 suggests that the company will not 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.

Union Pacific Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.79230.89050.85161.42461.48211.02650.88791.01221.04310
GMI 0.97460.95861.02360.8840.99671.03550.98010.9860.97560.8716
AQI 0.90970.99910.90291.01491.0550.97731.02771.22490.83590.8774
SGI 1.14731.04531.10360.7871.19951.15281.071.04961.09220.9093
DEPI 0.97740.9741.01030.99760.98730.96150.96751.03050.98760.9994
SGAI 0.91620.94150.89231.15830.88520.94130.93540.97760.96681.3846
LVGI 0.91731.06531.03921.00980.95020.96020.94891.00731.10131.0981
TATA -0.0381-0.0391-0.0448-0.0357-0.0319-0.0597-0.0493-0.0515-0.0446-0.0512
M-score -2.73-2.76-2.75-2.53-1.95-2.57-2.73-2.58-2.67-3.94

Union Pacific Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.89071.01960.96931.06091.01931.04340.94990.90820.99060
GMI 0.98840.98840.98820.96310.93510.93510.91620.92550.93330.9247
AQI 1.00991.22491.25851.30531.31490.83590.820.74180.73150.8774
SGI 1.04191.04191.05221.06971.0921.0921.06770.99990.9311.223
DEPI 1.00981.03051.01891.00790.99520.98760.9940.99410.99790.9994
SGAI 0.97250.97250.97181.0451.12351.12351.16661.14241.10861.1265
LVGI 0.94411.00731.01411.04381.11571.10131.06531.09681.07161.0981
TATA -0.0726-0.0744-0.0748-0.0656-0.069-0.0704-0.074-0.0812-0.078-0.0512
M-score -2.86-2.68-2.71-2.59-2.67-2.84-2.98-3.14-3.10-3.58
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