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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-2.87 (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 -2.87 suggests that the company is not a manipulator.

UNP' s Beneish M-Score Range Over the Past 10 Years
Min: -7.31   Max: -0.9
Current: -2.87

-7.31
-0.9

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was -0.90. 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 * 1.0415+0.528 * 0.9564+0.404 * 0.9618+0.892 * 0.8713+0.115 * 1.0039
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0625+4.679 * -0.052-0.327 * 1.0653
=-2.87

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,373 Mil.
Revenue was 4770 + 4829 + 5208 + 5562 = $20,369 Mil.
Gross Profit was 3568 + 3651 + 3890 + 4187 = $15,296 Mil.
Total Current Assets was $4,566 Mil.
Total Assets was $55,690 Mil.
Property, Plant and Equipment(Net PPE) was $49,461 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,030 Mil.
Selling, General & Admin. Expense(SGA) was $4,860 Mil.
Total Current Liabilities was $3,095 Mil.
Long-Term Debt was $14,777 Mil.
Net Income was 979 + 979 + 1117 + 1300 = $4,375 Mil.
Non Operating Income was 74 + 44 + 27 + 28 = $173 Mil.
Cash Flow from Operations was 1352 + 2173 + 1719 + 1852 = $7,096 Mil.
Accounts Receivable was $1,513 Mil.
Revenue was 5429 + 5614 + 6153 + 6182 = $23,378 Mil.
Gross Profit was 3976 + 4096 + 4379 + 4340 = $16,791 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 $5,250 Mil.
Total Current Liabilities was $3,413 Mil.
Long-Term Debt was $12,908 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)
=(1373 / 20369) / (1513 / 23378)
=0.06740635 / 0.06471897
=1.0415

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)
=(16791 / 23378) / (15296 / 20369)
=0.71823937 / 0.75094506
=0.9564

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 - (4566 + 49461) / 55690) / (1 - (4983 + 47512) / 54177)
=0.02986173 / 0.03104638
=0.9618

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
=20369 / 23378
=0.8713

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))
=(1958 / (1958 + 47512)) / (2030 / (2030 + 49461))
=0.03957954 / 0.03942437
=1.0039

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)
=(4860 / 20369) / (5250 / 23378)
=0.23859787 / 0.22457011
=1.0625

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)
=((14777 + 3095) / 55690) / ((12908 + 3413) / 54177)
=0.32091938 / 0.3012533
=1.0653

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
=(4375 - 173 - 7096) / 55690
=-0.052

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 -2.87 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 0.79230.89050.85161.42461.48211.02650.88791.01221.04310.9256
GMI 0.94080.99311.02360.8840.99671.03550.98010.9860.97560.9379
AQI 0.90970.99910.90291.01491.0550.97731.02771.22490.80990.9056
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 0.90350.95480.89231.15830.88520.94130.93540.97760.96681.1181
LVGI 0.91731.06531.03921.00980.95020.96020.94891.00731.10351.0959
TATA -0.0373-0.0391-0.0448-0.0357-0.0319-0.0597-0.0493-0.0515-0.0449-0.0512
M-score -2.74-2.74-2.75-2.53-1.95-2.57-2.73-2.58-2.69-2.99

Union Pacific Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.96471.06021.02371.04310.94430.88790.9510.92560.98731.0415
GMI 0.98580.96690.96290.95750.94260.96810.95730.95570.9650.9564
AQI 1.25851.30531.31490.80990.820.74180.73150.90560.88710.9618
SGI 1.05721.07041.08721.09221.07411.02280.96990.90930.87750.8713
DEPI 1.01891.00790.99520.98760.9940.99410.99790.99940.99821.0039
SGAI 0.97721.03271.03271.0271.05820.98291.0151.05261.03571.0625
LVGI 1.01411.04381.11571.10351.06531.09681.07161.09591.12781.0653
TATA -0.0524-0.0435-0.0473-0.0449-0.0484-0.056-0.0526-0.0512-0.0555-0.052
M-score -2.61-2.48-2.54-2.71-2.83-2.98-2.96-2.97-2.97-2.87
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