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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-2.52 (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 -2.52 suggests that the company is not a manipulator.

UNP' s 10-Year Beneish M-Score Range
Min: -10.64   Max: -1.37
Current: -2.52

-10.64
-1.37

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was -1.37. 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 * 1.0237+0.528 * 0.9818+0.404 * 1.3149+0.892 * 1.0872+0.115 * 0.9952
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9643+4.679 * -0.0474-0.327 * 1.1157
=-2.52

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,635 Mil.
Revenue was 6182 + 6015 + 5638 + 5630 = $23,465 Mil.
Gross Profit was 4340 + 4140 + 3798 + 3829 = $16,107 Mil.
Total Current Assets was $4,780 Mil.
Total Assets was $52,568 Mil.
Property, Plant and Equipment(Net PPE) was $45,553 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,873 Mil.
Selling, General & Admin. Expense(SGA) was $6,246 Mil.
Total Current Liabilities was $3,833 Mil.
Long-Term Debt was $11,045 Mil.
Net Income was 1370 + 1291 + 1088 + 1174 = $4,923 Mil.
Non Operating Income was 20 + 22 + 38 + 37 = $117 Mil.
Cash Flow from Operations was 2137 + 1454 + 1767 + 1942 = $7,300 Mil.
Accounts Receivable was $1,469 Mil.
Revenue was 5573 + 5470 + 5290 + 5250 = $21,583 Mil.
Gross Profit was 3810 + 3720 + 3520 + 3495 = $14,545 Mil.
Total Current Assets was $4,064 Mil.
Total Assets was $48,958 Mil.
Property, Plant and Equipment(Net PPE) was $43,311 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,772 Mil.
Selling, General & Admin. Expense(SGA) was $5,958 Mil.
Total Current Liabilities was $3,655 Mil.
Long-Term Debt was $8,764 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)
=(1635 / 23465) / (1469 / 21583)
=0.06967824 / 0.06806283
=1.0237

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)
=(4140 / 21583) / (4340 / 23465)
=0.67391002 / 0.68642659
=0.9818

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 - (4780 + 45553) / 52568) / (1 - (4064 + 43311) / 48958)
=0.04251636 / 0.03233384
=1.3149

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
=23465 / 21583
=1.0872

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 + 43311)) / (1873 / (1873 + 45553))
=0.03930528 / 0.03949311
=0.9952

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)
=(6246 / 23465) / (5958 / 21583)
=0.26618368 / 0.2760506
=0.9643

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)
=((11045 + 3833) / 52568) / ((8764 + 3655) / 48958)
=0.28302389 / 0.25366641
=1.1157

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
=(4923 - 117 - 7300) / 52568
=-0.0474

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 -2.52 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.92771.00870.88791.08950.94340.89361.01220.96471.06021.0237
GMI 1.02471.0091.00181.00370.98650.98950.9860.98580.98650.9818
AQI 0.98881.01111.02770.98281.0041.00991.22491.25851.30531.3149
SGI 1.13081.10211.071.04581.03951.03841.04961.05721.07041.0872
DEPI 0.97010.97320.96750.98180.99461.00981.03051.01891.00790.9952
SGAI 0.91460.92230.940.95910.97080.97430.97870.97390.96770.9643
LVGI 1.00050.96950.94891.00780.97210.94411.00731.01411.04381.1157
TATA -0.0514-0.0457-0.0493-0.0489-0.053-0.0523-0.0515-0.0525-0.0436-0.0474
M-score -2.65-2.57-2.72-2.59-2.74-2.77-2.58-2.61-2.46-2.52
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