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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

UNP' s 10-Year Beneish M-Score Range
Min: -7.31   Max: -1.69
Current: -2.67

-7.31
-1.69

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was -1.69. The lowest was -7.31. And the median was -2.64.


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 * 1.0431+0.528 * 0.9756+0.404 * 0.8359+0.892 * 1.0922+0.115 * 0.9876
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9562+4.679 * -0.0446-0.327 * 1.1013
=-2.67

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,611 Mil.
Revenue was 6153 + 6182 + 6015 + 5638 = $23,988 Mil.
Gross Profit was 4379 + 4340 + 4140 + 3798 = $16,657 Mil.
Total Current Assets was $4,679 Mil.
Total Assets was $52,716 Mil.
Property, Plant and Equipment(Net PPE) was $46,272 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,904 Mil.
Selling, General & Admin. Expense(SGA) was $6,310 Mil.
Total Current Liabilities was $3,765 Mil.
Long-Term Debt was $11,018 Mil.
Net Income was 1431 + 1370 + 1291 + 1088 = $5,180 Mil.
Non Operating Income was 67 + 20 + 22 + 38 = $147 Mil.
Cash Flow from Operations was 2027 + 2137 + 1454 + 1767 = $7,385 Mil.
Accounts Receivable was $1,414 Mil.
Revenue was 5630 + 5573 + 5470 + 5290 = $21,963 Mil.
Gross Profit was 3829 + 3810 + 3720 + 3520 = $14,879 Mil.
Total Current Assets was $3,990 Mil.
Total Assets was $49,731 Mil.
Property, Plant and Equipment(Net PPE) was $43,749 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,777 Mil.
Selling, General & Admin. Expense(SGA) was $6,042 Mil.
Total Current Liabilities was $3,791 Mil.
Long-Term Debt was $8,872 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)
=(1611 / 23988) / (1414 / 21963)
=0.06715858 / 0.064381
=1.0431

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)
=(4340 / 21963) / (4379 / 23988)
=0.67745754 / 0.69438886
=0.9756

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 - (4679 + 46272) / 52716) / (1 - (3990 + 43749) / 49731)
=0.0334813 / 0.0400555
=0.8359

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
=23988 / 21963
=1.0922

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))
=(1777 / (1777 + 43749)) / (1904 / (1904 + 46272))
=0.03903264 / 0.03952175
=0.9876

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)
=(6310 / 23988) / (6042 / 21963)
=0.26304819 / 0.27509903
=0.9562

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)
=((11018 + 3765) / 52716) / ((8872 + 3791) / 49731)
=0.28042719 / 0.25462991
=1.1013

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
=(5180 - 147 - 7385) / 52716
=-0.0446

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 -2.67 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 1.04150.97460.95861.02360.8840.99671.03550.98010.9860.9756
AQI 0.99770.90970.99910.90291.01491.0550.97731.02771.22490.8359
SGI 1.11161.14731.04531.10360.7871.19951.15281.071.04961.0922
DEPI 0.97570.97740.9741.01030.99760.98730.96150.96751.03050.9876
SGAI 0.93790.91340.93140.88911.15190.86750.92980.940.97870.9562
LVGI 0.93730.91731.06531.03921.00980.95020.96020.94891.00731.1013
TATA -0.0481-0.0381-0.0391-0.0448-0.0357-0.0319-0.0597-0.0493-0.0515-0.0446
M-score -2.34-2.73-2.76-2.75-2.53-1.95-2.57-2.73-2.58-2.67

Union Pacific Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.00870.88791.08950.94340.89361.01220.96471.06021.02371.0431
GMI 1.0091.00181.00370.98650.98950.9860.98580.98650.98180.9756
AQI 1.01111.02770.98281.0041.00991.22491.25851.30531.31490.8359
SGI 1.10211.071.04581.03951.03841.04961.05721.07041.08721.0922
DEPI 0.97320.96750.98180.99461.00981.03051.01891.00790.99520.9876
SGAI 0.92230.940.95910.97080.97430.97870.97390.96770.96430.9562
LVGI 0.96950.94891.00780.97210.94411.00731.01411.04381.11571.1013
TATA -0.0457-0.0493-0.0489-0.053-0.0523-0.0515-0.0524-0.0435-0.0474-0.0446
M-score -2.57-2.72-2.59-2.74-2.77-2.58-2.61-2.46-2.52-2.67
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