Union Pacific Corp. (UNP) | Short-term (Operating) Activity

Ratios (Summary)

Union Pacific Corp., short-term (operating) activity ratios

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Turnover Ratios
Inventory turnover	31.71	31.85	31.77	29.77	39.93
Receivables turnover	15.72	13.96	14.33	21.24	30.25
Payables turnover	25.36	23.88	25.06	23.11	28.57
Working capital turnover	42.27	47.70	35.34	14.17	–
Average No. of Days
Average inventory processing period	12	11	11	12	9
Add: Average receivable collection period	23	26	25	17	12
Operating cycle	35	38	37	29	21
Less: Average payables payment period	14	15	15	16	13
Cash conversion cycle	20	22	22	14	8

Source: Based on data from Union Pacific Corp. Annual Reports

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as revenue divided by inventory.	Union Pacific Corp.'s inventory turnover improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Union Pacific Corp.'s receivables turnover deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.
Payables turnover	An activity ratio calculated as revenue divided by payables.	Union Pacific Corp.'s payables turnover declined from 2010 to 2011 but then increased from 2011 to 2012 exceeding 2010 level.
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	Union Pacific Corp.'s working capital turnover improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.
Average inventory processing period	An activity ratio equal to the number of days in the period divided by inventory turnover over the period.	Union Pacific Corp.'s average inventory processing period improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnoverd.	Union Pacific Corp.'s average receivable collection period deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Union Pacific Corp.'s operating cycle deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.	Union Pacific Corp.'s average payables payment period increased from 2010 to 2011 but then declined significantly from 2011 to 2012.
Cash conversion cycle	A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.	Union Pacific Corp.'s cash conversion cycle improved from 2010 to 2011 and from 2011 to 2012.

Inventory Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Operating revenues	20,926	19,557	16,965	14,143	17,970
Materials and supplies	660	614	534	475	450
Inventory Turnover, Comparison to Industry
Union Pacific Corp.¹	31.71	31.85	31.77	29.77	39.93
Industry, Industrials	5.68	5.91	6.54	7.40	7.51

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Inventory turnover = Operating revenues ÷ Materials and supplies
= 20,926 ÷ 660 = 31.71

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as revenue divided by inventory.	Union Pacific Corp.'s inventory turnover improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.

Receivables Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Operating revenues	20,926	19,557	16,965	14,143	17,970
Accounts receivable, net	1,331	1,401	1,184	666	594
Receivables Turnover, Comparison to Industry
Union Pacific Corp.¹	15.72	13.96	14.33	21.24	30.25
Industry, Industrials	6.86	6.58	6.61	6.97	6.61

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Receivables turnover = Operating revenues ÷ Accounts receivable, net
= 20,926 ÷ 1,331 = 15.72

Ratio	Description	The company
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Union Pacific Corp.'s receivables turnover deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.

Payables Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Operating revenues	20,926	19,557	16,965	14,143	17,970
Accounts payable	825	819	677	612	629
Payables Turnover, Comparison to Industry
Union Pacific Corp.¹	25.36	23.88	25.06	23.11	28.57
Industry, Industrials	9.93	9.52	9.91	11.16	10.92

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Payables turnover = Operating revenues ÷ Accounts payable
= 20,926 ÷ 825 = 25.36

Ratio	Description	The company
Payables turnover	An activity ratio calculated as revenue divided by payables.	Union Pacific Corp.'s payables turnover declined from 2010 to 2011 but then increased from 2011 to 2012 exceeding 2010 level.

Working Capital Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Current assets	3,614	3,727	3,432	3,680	2,813
Less: Current liabilities	3,119	3,317	2,952	2,682	2,880
Working capital	495	410	480	998	(67)
Operating revenues	20,926	19,557	16,965	14,143	17,970
Working Capital Turnover, Comparison to Industry
Union Pacific Corp.¹	42.27	47.70	35.34	14.17	–
Industry, Industrials	8.80	10.55	8.41	11.52	31.48

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Working capital turnover = Operating revenues ÷ Working capital
= 20,926 ÷ 495 = 42.27

Ratio	Description	The company
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	Union Pacific Corp.'s working capital turnover improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.

Average Inventory Processing Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Inventory turnover	31.71	31.85	31.77	29.77	39.93
Average Inventory Processing Period (no. of days), Comparison to Industry
Union Pacific Corp.¹	12	11	11	12	9
Industry, Industrials	64	62	56	49	49

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 31.71 = 12

Ratio	Description	The company
Average inventory processing period	An activity ratio equal to the number of days in the period divided by inventory turnover over the period.	Union Pacific Corp.'s average inventory processing period improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.

Average Receivable Collection Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Receivables turnover	15.72	13.96	14.33	21.24	30.25
Average Receivable Collection Period (no. of days), Comparison to Industry
Union Pacific Corp.¹	23	26	25	17	12
Industry, Industrials	53	55	55	52	55

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 15.72 = 23

Ratio	Description	The company
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnoverd.	Union Pacific Corp.'s average receivable collection period deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.

Operating Cycle

No. of days

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Average inventory processing period	12	11	11	12	9
Average receivable collection period	23	26	25	17	12
Operating Cycle, Comparison to Industry
Union Pacific Corp.¹	35	38	37	29	21
Industry, Industrials	117	117	111	102	104

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Operating cycle = Average inventory processing period + Average receivable collection period
= 12 + 23 = 35

Ratio	Description	The company
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Union Pacific Corp.'s operating cycle deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.

Average Payables Payment Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Payables turnover	25.36	23.88	25.06	23.11	28.57
Average Payables Payment Period (no. of days), Comparison to Industry
Union Pacific Corp.¹	14	15	15	16	13
Industry, Industrials	37	38	37	33	33

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 25.36 = 14

Ratio	Description	The company
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.	Union Pacific Corp.'s average payables payment period increased from 2010 to 2011 but then declined significantly from 2011 to 2012.

Cash Conversion Cycle

No. of days

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Average inventory processing period	12	11	11	12	9
Average receivable collection period	23	26	25	17	12
Average payables payment period	14	15	15	16	13
Cash Conversion Cycle, Comparison to Industry
Union Pacific Corp.¹	20	22	22	14	8
Industry, Industrials	81	79	74	69	70

Source: Based on data from Union Pacific Corp. Annual Reports

2012 Calculations

¹ Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 12 + 23 – 14 = 20

Ratio	Description	The company
Cash conversion cycle	A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.	Union Pacific Corp.'s cash conversion cycle improved from 2010 to 2011 and from 2011 to 2012.