Business Analysis : United Parcel Service

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The company that I chose was United Parcel Service. UPS 's main business is the time-definite delivery of packages and documents worldwide. Today, UPS is a global company with one of the most recognized brands in the world. They have become the world 's largest package delivery company and a leading global provider of specialized transportation and logistics services. (,2014). Along with UPS this study examines the financial management policies of another competitor in the Air Delivery & Freight Services Industry, Federal Express; and also the industry in a whole. I used ratio analysis to look at profitability and to understand how management, investment and financial management activities impact the overall performance of FedEx…show more content…
Next, Outside of UPS’s major investments in their operations infrastructure, the majority of their assets are highly liquid or short-term investments. UPS also relies more heavily on long-term liabilities, whereas FedEx relies more heavily on short-term liabilities. It appears that UPS is able to drive a higher NOPAT Margin (operating income*(1-tax rate), this might mean that they are able to ask a price premium for their services, and that UPS is able to run their operations more efficiently. The competitor that I compared with UPS in the Air Delivery & Freight Services industry in the United States is FedEx. FedEx, being the smaller company with a market share that is maybe a third of UPS. FedEx like UPS offers a range of shipping services for delivery of packages and freight and offers domestic pickup-and-delivery services within certain foreign countries. UPS has more working capital than FedEx and FedEx’s fixed asset turnover is slightly higher than that of UPS. In the chart above it shows that FedEx’s total asset turnover is lower than UPS’ total asset turnover but if you look at the different sizes of the company’s, with UPS being a giant in the industry this is actually false and FedEx has the higher total asset turnover. This might point to FedEx making more use than UPS of leasing or rental of equipment. According to the financial numbers stated above, and in the financial statements of both companies it is clear that UPS is the larger company when comparing
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