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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-2.61 (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 -2.46 suggests that the company is not a manipulator.

UNP' s 10-Year Beneish M-Score Range
Min: -10.64   Max: -0.86
Current: -2.61

-10.64
-0.86

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was -0.86. The lowest was -10.64. 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 * 1.0602+0.528 * 0.9865+0.404 * 1.3053+0.892 * 1.0704+0.115 * 1.0079
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9677+4.679 * -0.0436-0.327 * 1.0438
=-2.46

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
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.
Net Income was 1291 + 1088 + 1174 + 1151 = $4,704 Mil.
Non Operating Income was 22 + 38 + 37 + 28 = $125 Mil.
Cash Flow from Operations was 1454 + 1767 + 1942 + 1663 = $6,826 Mil.
Accounts Receivable was $1,468 Mil.
Revenue was 5470 + 5290 + 5250 + 5343 = $21,353 Mil.
Gross Profit was 3720 + 3520 + 3495 + 3621 = $14,356 Mil.
Total Current Assets was $4,543 Mil.
Total Assets was $49,026 Mil.
Property, Plant and Equipment(Net PPE) was $42,911 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,772 Mil.
Selling, General & Admin. Expense(SGA) was $5,941 Mil.
Total Current Liabilities was $3,825 Mil.
Long-Term Debt was $9,076 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)
=(1666 / 22856) / (1468 / 21353)
=0.07289114 / 0.06874912
=1.0602

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)
=(3798 / 21353) / (4140 / 22856)
=0.67231771 / 0.68152783
=0.9865

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 - (4503 + 44901) / 51562) / (1 - (4543 + 42911) / 49026)
=0.04185253 / 0.03206462
=1.3053

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
=22856 / 21353
=1.0704

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))
=(1772 / (1772 + 42911)) / (1839 / (1839 + 44901))
=0.03965714 / 0.03934531
=1.0079

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)
=(6154 / 22856) / (5941 / 21353)
=0.26925096 / 0.27822788
=0.9677

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)
=((10385 + 3777) / 51562) / ((9076 + 3825) / 49026)
=0.27465963 / 0.26314609
=1.0438

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
=(4704 - 125 - 6826) / 51562
=-0.0436

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 -2.46 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03491.23310.79230.89051.48211.02650.88791.0122
GMI 1.09261.04150.94080.99310.99671.03550.98010.986
AQI 1.14230.99770.90970.99911.0550.97731.02771.2249
SGI 1.05751.11161.14731.04531.19951.15281.071.0496
DEPI 0.98410.97570.97740.9740.98730.96150.96751.0305
SGAI 0.91470.94451.18160.95070.86750.92980.940.9787
LVGI 0.98920.93730.91731.06530.95020.96020.94891.0073
TATA -0.0503-0.0481-0.0373-0.0391-0.0319-0.0597-0.0493-0.0515
M-score -2.51-2.34-2.79-2.74-1.95-2.57-2.73-2.58

Union Pacific Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.90210.92771.00870.88791.08950.94340.89361.01220.96471.0602
GMI 0.99761.02471.0091.00181.00370.98650.98950.9860.98580.9865
AQI 1.00540.98881.01111.02770.98281.0041.00991.22491.25851.3053
SGI 1.15371.13081.10211.071.04581.03951.03841.04961.05721.0704
DEPI 0.96310.97010.97320.96750.98180.99461.00981.03051.01891.0079
SGAI 0.91490.91460.92230.940.95910.97080.97430.97870.97390.9677
LVGI 0.96181.00050.96950.94891.00780.97210.94411.00731.01411.0438
TATA -0.0569-0.0514-0.0457-0.0493-0.0489-0.053-0.0523-0.0515-0.0525-0.0436
M-score -2.68-2.65-2.57-2.72-2.59-2.74-2.77-2.58-2.61-2.46
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