FedEx Financial Statements and Financial Ratios Analyzed

FedEx: Brief Summary

FedEx (FDX) has its home headquarters in Memphis, Tennessee.  The organization competes in the integrated freight and logistics industry, specifically the industrial sector.  At present, there are proximally 500,000 employees working full-time for FedEx.

From a financial perspective, FedEx Corporation currently has a market cap of $41.2 billion.  Their stock price for the last 52 weeks has ranged from $88.69 to $178.50.  As for dividends, the organization does pay out quarterly dividends and a dividend yield of 1.64%.  His current beta is 1.33.  This indicates that the organization’s stock is slight to moderately riskier as compared to the overall market.

FedEx Financial Report Sources

“FedEx 2022 Company Analysis… For Beginners: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA., and owner of Quality Business Plan.  In this report, I used FedEx's 2022 10k, 2017 10k annual report, 2016 10k annual report, 2018 10k annual report, and 2019 10k annual report as the basis for information gathering. 

Section 1: FedEx Income Statement Analyzed

In this section, I walk through a broad definition of what an income statement is and why it is essential.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc., in detail.  After each line item is defined and discussed, I finally offer a summary analysis of FedEx's significant income statement line item trends in most cases.

FedEx: Revenue Growth.

FedEx’s revenues were $65.4 billion in 2018.  In 2022, the organization’s revenues increased to $93.5 billion.  In the last five years, the average growth rate annually for the organization was 9.6%.  From my experience, this growth rate is above average for most multinational organizations.  This growth trend indicates the organization is taking steps to continually increase market share for the firm year-over-year.  From an investor’s perspective, this is a good trend.

Analyst Grade: A

FedEx 2021 Summary Income Statement
Column1	2021	2020	2019	2018	2017
Revenues	83,959	69,217	69,693	65,450	60,319
COGS
Gross Profit	83,959	69,217	69,693	65,450	60,319
SG&A	30,173	25,031	24,776	23,795	21,989
Depreciation	3,793	3,615	3,353	3,095	2,995
R & D	-	-	-	-	-
Other			-	-	-
Total Operating Expenses	78,102	66,800	65,227	61,178	55,753
EBIT	5,857	2,417	4,466	4,272	4,566
Other Income
Interest Expense	793	672	588	558	512
EBT	6,674	1,669	655	4,353	4,579
Taxes	1,443	383	115	(219)	1,582
Net Income	5,231	1,286	540	4,572	2,997

 

Section 2: FedEx Balance Sheet Analyzed

For the FedEx balance sheet, I again go through each vital line item from the balance sheet.  In reviewing each line item, I will define their balance sheets line items, such as cash, property, plant and equipment, and liabilities.  Next, I then offer a summary analysis of their important balance sheet line items.

FedEx: Cash

FedEx’s cash holding was $3.2 billion in 2018, or 5% of sales.  In 2022, the organization’s cash holdings would increase to $6.8 billion or 7.4% of sales.  This trend indicates that the company has more cash on hand as compared to sales year-over-year.  From an investor’s perspective, this is not a good trend.  A better trend would be for the organization to have a steady cash position as compared to the sales. 

Analyst Grade: B

FedEx 2021 Summary Balance Sheet
Column1	2021	2020	2019	2018	2017
Cash	7,087	4,881	2,319	3,265	3,969
Short Term Investment	-	-	-	-	-
Account Receivable	7,087	4,881	9,116	8,481	7,599
Inventory	587	572	553	525	514
Other
Current Assets	20,580	16,383	13,086	13,341	12,628
Net PPE	35,752	33,608	30,429	28,154	25,981
Goodwill	6,992	6,372	6,884	6,973	7,154
Other
Total Assets	82,777	73,537	54,403	52,330	48,552
Accounts Payable	3,841	3,269	3,030	2,977	2,752
Accrued Expense	2,903	1,569	3,278	3,131	3,230
Accrued Taxes
Notes Payable
LT Debt - Current	146	51	964	1,342	22
Other
Total Current Liabilities	13,660	10,344	9,013	9,627	7,918
LT Debt	20,733	21,952	16,617	15,243	14,909
Other
Total Liabilities	58,609	55,242	36,646	32,914	32,479
Common Stock	3,513	3,388	3,231	3,117	3,005
Treasury	8,430	9,162	9,289	7,978	7,382
Retained Earnings	29,817	25,216	24,648	24,823	20,833
Other
Total Equity	24,168	18,295	17,757	19,416	16,073
Total Equity & Liability	82,777	73,537	54,403	52,330	48,552

 

Section 3: FedEx Financial Ratios Analyzed

For this section, I have chosen several different financial ratios to review for FedEx.  In reviewing each of their financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of their important Financial ratios. 

FedEx Current Ratio.

FedEx’s current ratio was 1.39 in 2018.  As of 2020, FedEx’s current ratio increased to 1.58.  However, in the last two years, the organization has taken steps to reduce its current ratio, which resulted in 1.4 in 2022.  If the trend continues, then the organization would be more in line with other multinational organizations, which drive to achieve a 1.0 current ratio.  However, if their previous performance is any indicator, then investors should not hold their breath for this achievement.  From an investor’s perspective, this is an ok trend.

Analyst Grade: B

FedEx Return on Assets.

FedEx’s return on assets (ROA) was 8.7% in 2018.  As of 2022, the return on assets was 4.4%.  The decrease in return on assets indicates that the organization is not utilizing total assets under management in an efficient manner year-over-year from a revenue generation perspective.  From an investor’s perspective, this is a below-average trend.

Analyst Grade: C