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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 -2.61 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 * 0.9647+0.528 * 0.9858+0.404 * 1.2585+0.892 * 1.0572+0.115 * 1.0189
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9739+4.679 * -0.0524-0.327 * 1.0141
=-2.61

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $1,542 Mil.
Revenue was 5638 + 5630 + 5573 + 5470 = $22,311 Mil.
Gross Profit was 3798 + 3829 + 3810 + 3720 = $15,157 Mil.
Total Current Assets was $4,679 Mil.
Total Assets was $50,898 Mil.
Property, Plant and Equipment(Net PPE) was $44,189 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,807 Mil.
Selling, General & Admin. Expense(SGA) was $6,079 Mil.
Total Current Liabilities was $4,188 Mil.
Long-Term Debt was $9,544 Mil.
Net Income was 1088 + 1174 + 1151 + 1106 = $4,519 Mil.
Non Operating Income was 38 + 37 + 28 + 19 = $122 Mil.
Cash Flow from Operations was 1767 + 1942 + 1663 + 1694 = $7,066 Mil.
Accounts Receivable was $1,512 Mil.
Revenue was 5290 + 5250 + 5343 + 5221 = $21,104 Mil.
Gross Profit was 3520 + 3495 + 3621 + 3498 = $14,134 Mil.
Total Current Assets was $4,646 Mil.
Total Assets was $48,561 Mil.
Property, Plant and Equipment(Net PPE) was $42,376 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,767 Mil.
Selling, General & Admin. Expense(SGA) was $5,904 Mil.
Total Current Liabilities was $3,610 Mil.
Long-Term Debt was $9,309 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)
=(1542 / 22311) / (1512 / 21104)
=0.06911389 / 0.07164519
=0.9647

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)
=(3829 / 21104) / (3798 / 22311)
=0.66973086 / 0.67935099
=0.9858

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 + 44189) / 50898) / (1 - (4646 + 42376) / 48561)
=0.03988369 / 0.0316921
=1.2585

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
=22311 / 21104
=1.0572

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))
=(1767 / (1767 + 42376)) / (1807 / (1807 + 44189))
=0.040029 / 0.03928602
=1.0189

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)
=(6079 / 22311) / (5904 / 21104)
=0.2724665 / 0.27975739
=0.9739

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)
=((9544 + 4188) / 50898) / ((9309 + 3610) / 48561)
=0.26979449 / 0.26603653
=1.0141

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
=(4519 - 122 - 7066) / 50898
=-0.0524

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 -2.61 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 1.09261.04150.94080.99311.02360.8840.99671.03550.98010.986
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 0.91470.94451.18160.95070.88911.15190.86750.92980.940.9787
LVGI 0.98920.93730.91731.06531.03921.00980.95020.96020.94891.0073
TATA -0.0503-0.0481-0.0373-0.0391-0.0448-0.0357-0.0319-0.0597-0.0493-0.0515
M-score -2.51-2.34-2.79-2.74-2.75-2.53-1.95-2.57-2.73-2.58

Union Pacific Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.02650.90210.92771.00870.88791.08950.94340.89361.01220.9647
GMI 1.01310.99761.02471.0091.00181.00370.98650.98950.9860.9858
AQI 0.97731.00540.98881.01111.02770.98281.0041.00991.22491.2585
SGI 1.15281.15371.13081.10211.071.04581.03951.03841.04961.0572
DEPI 0.96150.96310.97010.97320.96750.98180.99461.00981.03051.0189
SGAI 0.92980.91490.91460.92230.940.95910.97080.97430.97870.9739
LVGI 0.96020.96181.00050.96950.94891.00780.97210.94411.00731.0141
TATA -0.0597-0.0569-0.0514-0.0457-0.0493-0.0489-0.0529-0.0522-0.0515-0.0524
M-score -2.58-2.68-2.65-2.57-2.72-2.59-2.74-2.77-2.58-2.61
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