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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-2.46 (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: -10.82   Max: -1.35
Current: -2.46

-10.82
-1.35

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was -1.35. The lowest was -10.82. And the median was -2.63.


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 1.02161.24910.79230.89050.85161.42461.48211.02650.88791.0122
GMI 1.09261.04150.97460.86511.13150.88330.99981.03550.98010.986
AQI 1.14250.99750.90970.99910.90291.00951.06060.97731.02771.2249
SGI 1.05751.11161.14731.04531.10360.7871.19951.15281.071.0496
DEPI 0.98410.97570.97740.9740.99561.00670.99280.96150.96751.0305
SGAI 1.0670.80970.91621.25110.87131.15190.86750.92980.940.9787
LVGI 0.9880.93840.91731.06531.03921.00440.95530.96020.94891.0073
TATA -0.0498-0.0481-0.0381-0.0404-0.0454-0.036-0.0319-0.0597-0.0493-0.0515
M-score -2.54-2.31-2.73-2.87-2.70-2.53-1.95-2.57-2.73-2.58

Union Pacific Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.90210.92771.00870.88791.08950.94340.89361.01220.96471.0602
GMI 1.01880.97970.96570.95960.96241.00811.01081.00711.00670.9865
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 -0.056-0.0514-0.0457-0.0493-0.0489-0.0528-0.0522-0.0515-0.0524-0.0436
M-score -2.66-2.67-2.59-2.74-2.61-2.72-2.75-2.57-2.60-2.46
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