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Union Pacific Corp (NYSE:UNP)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

UNP' s 10-Year Beneish M-Score Range
Min: -10.64   Max: -0.85
Current: -2.8

-10.64
-0.85

During the past 13 years, the highest Beneish M-Score of Union Pacific Corp was -0.85. The lowest was -10.64. And the median was -2.64.


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 * 0.9443+0.528 * 0.9602+0.404 * 0.82+0.892 * 1.0741+0.115 * 0.994
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9839+4.679 * -0.0484-0.327 * 1.0653
=-2.80

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $1,564 Mil.
Revenue was 5614 + 6153 + 6182 + 6015 = $23,964 Mil.
Gross Profit was 4096 + 4379 + 4340 + 4140 = $16,955 Mil.
Total Current Assets was $4,479 Mil.
Total Assets was $53,145 Mil.
Property, Plant and Equipment(Net PPE) was $46,928 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,931 Mil.
Selling, General & Admin. Expense(SGA) was $6,424 Mil.
Total Current Liabilities was $3,390 Mil.
Long-Term Debt was $11,884 Mil.
Net Income was 1151 + 1431 + 1370 + 1291 = $5,243 Mil.
Non Operating Income was 25 + 67 + 20 + 22 = $134 Mil.
Cash Flow from Operations was 2064 + 2027 + 2137 + 1454 = $7,682 Mil.
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.



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)
=(1564 / 23964) / (1542 / 22311)
=0.06526456 / 0.06911389
=0.9443

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)
=(4379 / 22311) / (4096 / 23964)
=0.67935099 / 0.70751961
=0.9602

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 - (4479 + 46928) / 53145) / (1 - (4679 + 44189) / 50898)
=0.03270298 / 0.03988369
=0.82

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
=23964 / 22311
=1.0741

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))
=(1807 / (1807 + 44189)) / (1931 / (1931 + 46928))
=0.03928602 / 0.03952189
=0.994

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)
=(6424 / 23964) / (6079 / 22311)
=0.26806877 / 0.2724665
=0.9839

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)
=((11884 + 3390) / 53145) / ((9544 + 4188) / 50898)
=0.28740239 / 0.26979449
=1.0653

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
=(5243 - 134 - 7682) / 53145
=-0.0484

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 -2.80 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.23310.79230.89050.85161.42461.48211.02650.88791.01221.0431
GMI 1.04150.97460.95861.02360.8840.99671.03550.98010.9860.9756
AQI 0.99770.90970.99910.90291.01491.0550.97731.02771.22490.8359
SGI 1.11161.14731.04531.10360.7871.19951.15281.071.04961.0922
DEPI 0.97570.97740.9741.01030.99760.98730.96150.96751.03050.9876
SGAI 0.93790.91340.93140.88911.15190.86750.92980.940.97870.9562
LVGI 0.93730.91731.06531.03921.00980.95020.96020.94891.00731.1013
TATA -0.0481-0.0381-0.0391-0.0448-0.0357-0.0319-0.0597-0.0493-0.0515-0.0446
M-score -2.34-2.73-2.76-2.75-2.53-1.95-2.57-2.73-2.58-2.67

Union Pacific Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.88791.08950.94340.89361.01220.96471.06021.02371.04310.9443
GMI 1.00181.00370.98650.98950.9860.98580.98650.98180.97560.9602
AQI 1.02770.98281.0041.00991.22491.25851.30531.31490.83590.82
SGI 1.071.04581.03951.03841.04961.05721.07041.08721.09221.0741
DEPI 0.96750.98180.99461.00981.03051.01891.00790.99520.98760.994
SGAI 0.940.95910.97080.97430.97870.97390.96770.96430.95620.9839
LVGI 0.94891.00780.97210.94411.00731.01411.04381.11571.10131.0653
TATA -0.0493-0.0489-0.053-0.0523-0.0515-0.0524-0.0435-0.0473-0.0446-0.0484
M-score -2.72-2.59-2.74-2.77-2.58-2.61-2.46-2.52-2.67-2.80
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