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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-3.00 (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 -3.00 suggests that the company is not a manipulator.

UNP' s 10-Year Beneish M-Score Range
Min: -10.64   Max: -0.85
Current: -3

-10.64
-0.85

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was -0.85. The lowest was -10.64. And the median was -2.66.


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 * 0.8879+0.528 * 0.9316+0.404 * 0.7418+0.892 * 1.0228+0.115 * 0.9941
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0293+4.679 * -0.056-0.327 * 1.0968
=-3.00

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $1,513 Mil.
Revenue was 5429 + 5614 + 6153 + 6182 = $23,378 Mil.
Gross Profit was 4288 + 4096 + 4379 + 4340 = $17,103 Mil.
Total Current Assets was $4,983 Mil.
Total Assets was $54,177 Mil.
Property, Plant and Equipment(Net PPE) was $47,512 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,958 Mil.
Selling, General & Admin. Expense(SGA) was $6,479 Mil.
Total Current Liabilities was $3,413 Mil.
Long-Term Debt was $12,908 Mil.
Net Income was 1204 + 1151 + 1431 + 1370 = $5,156 Mil.
Non Operating Income was 141 + 25 + 67 + 20 = $253 Mil.
Cash Flow from Operations was 1709 + 2064 + 2027 + 2137 = $7,937 Mil.
Accounts Receivable was $1,666 Mil.
Revenue was 6015 + 5638 + 5630 + 5573 = $22,856 Mil.
Gross Profit was 4140 + 3798 + 3829 + 3810 = $15,577 Mil.
Total Current Assets was $4,503 Mil.
Total Assets was $51,562 Mil.
Property, Plant and Equipment(Net PPE) was $44,901 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,839 Mil.
Selling, General & Admin. Expense(SGA) was $6,154 Mil.
Total Current Liabilities was $3,777 Mil.
Long-Term Debt was $10,385 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)
=(1513 / 23378) / (1666 / 22856)
=0.06471897 / 0.07289114
=0.8879

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)
=(4096 / 22856) / (4288 / 23378)
=0.68152783 / 0.73158525
=0.9316

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 - (4983 + 47512) / 54177) / (1 - (4503 + 44901) / 51562)
=0.03104638 / 0.04185253
=0.7418

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
=23378 / 22856
=1.0228

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))
=(1839 / (1839 + 44901)) / (1958 / (1958 + 47512))
=0.03934531 / 0.03957954
=0.9941

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)
=(6479 / 23378) / (6154 / 22856)
=0.2771409 / 0.26925096
=1.0293

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)
=((12908 + 3413) / 54177) / ((10385 + 3777) / 51562)
=0.3012533 / 0.27465963
=1.0968

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
=(5156 - 253 - 7937) / 54177
=-0.056

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 -3.00 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.23310.79230.89050.85161.42461.48211.02650.88791.01221.0431
GMI 1.04150.97460.99330.98790.88120.99981.03550.98010.9860.9756
AQI 0.99770.90970.99910.90291.00951.06060.97731.02771.22490.8359
SGI 1.11161.14731.04531.10360.7871.19951.15281.071.04961.0922
DEPI 0.97570.97740.9741.01030.9920.99280.96150.96751.03050.9876
SGAI 0.93790.91340.95040.87131.15190.86750.92980.940.97870.9562
LVGI 0.93730.91731.06531.03921.00440.95530.96020.94891.00731.1013
TATA -0.0481-0.0381-0.0404-0.0448-0.036-0.0319-0.0597-0.0493-0.0515-0.0446
M-score -2.34-2.73-2.75-2.77-2.54-1.95-2.57-2.73-2.58-2.67

Union Pacific Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.08950.94340.89361.01220.96471.06021.02371.04310.94430.8879
GMI 0.96241.00811.01081.00711.00670.98650.98180.97560.96020.9316
AQI 0.98281.0041.00991.22491.25851.30531.31490.83590.820.7418
SGI 1.04581.03951.03841.04961.05721.07041.08721.09221.07411.0228
DEPI 0.98180.99461.00981.03051.01891.00790.99520.98760.9940.9941
SGAI 0.95910.97080.97430.97870.97390.96770.96430.95620.98391.0293
LVGI 1.00780.97210.94411.00731.01411.04381.11571.10131.06531.0968
TATA -0.0489-0.0528-0.0522-0.0515-0.0524-0.0436-0.0474-0.0446-0.0484-0.056
M-score -2.61-2.72-2.75-2.57-2.60-2.46-2.52-2.67-2.80-3.00
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