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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-2.58 (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 -2.58 suggests that the company is not a manipulator.

UNP' s 10-Year Beneish M-Score Range
Min: -7.31   Max: -1.89
Current: -2.58

-7.31
-1.89

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was -1.89. The lowest was -7.31. And the median was -2.70.


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 * 1.0122+0.528 * 0.986+0.404 * 1.2249+0.892 * 1.0496+0.115 * 1.0305
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9787+4.679 * -0.0515-0.327 * 1.0073
=-2.58

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
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.
Net Income was 1174 + 1151 + 1106 + 957 = $4,388 Mil.
Non Operating Income was 37 + 28 + 19 + 40 = $124 Mil.
Cash Flow from Operations was 1942 + 1663 + 1694 + 1524 = $6,823 Mil.
Accounts Receivable was $1,331 Mil.
Revenue was 5250 + 5343 + 5221 + 5112 = $20,926 Mil.
Gross Profit was 3495 + 3621 + 3498 + 3364 = $13,978 Mil.
Total Current Assets was $3,614 Mil.
Total Assets was $47,153 Mil.
Property, Plant and Equipment(Net PPE) was $41,997 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,760 Mil.
Selling, General & Admin. Expense(SGA) was $5,882 Mil.
Total Current Liabilities was $3,119 Mil.
Long-Term Debt was $8,801 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)
=(1414 / 21963) / (1331 / 20926)
=0.064381 / 0.06360508
=1.0122

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)
=(3810 / 20926) / (3829 / 21963)
=0.66797286 / 0.67745754
=0.986

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 - (3990 + 43749) / 49731) / (1 - (3614 + 41997) / 47153)
=0.0400555 / 0.03270206
=1.2249

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
=21963 / 20926
=1.0496

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))
=(1760 / (1760 + 41997)) / (1777 / (1777 + 43749))
=0.04022214 / 0.03903264
=1.0305

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)
=(6042 / 21963) / (5882 / 20926)
=0.27509903 / 0.28108573
=0.9787

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)
=((8872 + 3791) / 49731) / ((8801 + 3119) / 47153)
=0.25462991 / 0.2527941
=1.0073

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
=(4388 - 124 - 6823) / 49731
=-0.0515

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 -2.58 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 1.03491.23310.79230.89050.85161.42461.48211.02650.88791.0122
GMI 1.09261.04150.94080.89621.13420.8840.99671.03550.98010.986
AQI 1.14230.99770.90970.99910.90291.01491.0550.97731.02771.2249
SGI 1.05751.11161.14731.04531.10360.7871.19951.15281.071.0496
DEPI 0.98410.97570.97740.9741.01030.99760.98730.96150.96751.0305
SGAI 0.91470.94451.18160.97010.87131.15190.86750.92980.940.9787
LVGI 0.98920.93730.91731.06531.03921.00980.95020.96020.94891.0073
TATA -0.0503-0.0481-0.0373-0.0404-0.0448-0.0357-0.0319-0.0597-0.0493-0.0515
M-score -2.51-2.34-2.79-2.80-2.69-2.53-1.95-2.57-2.73-2.58

Union Pacific Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.94951.02650.90210.92771.00870.88791.08950.94340.89361.0122
GMI 1.00631.01310.99761.02471.0091.00181.00370.98650.98950.986
AQI 1.01460.97731.00540.98881.01111.02770.98281.0041.00991.2249
SGI 1.15641.15281.15371.13081.10211.071.04581.03951.03841.0496
DEPI 0.97670.96150.96310.97010.97320.96750.98180.99461.00981.0305
SGAI 0.93660.92980.91490.91460.92230.940.95910.97080.97430.9787
LVGI 0.97320.96020.96181.00050.96950.94891.00780.97210.94411.0073
TATA -0.0595-0.0597-0.0569-0.0514-0.0457-0.0493-0.0489-0.0529-0.0522-0.0515
M-score -2.64-2.58-2.68-2.65-2.57-2.72-2.59-2.74-2.77-2.58
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