FedEx Financial Statements and Financial Ratios Analyzed

FedEx Financial Statements and FedEx Financial Ratios

🚀 Delivering Insights: Unpack FedEx's 2022 Financial Performance! 📊

FedEx 2023 Beginner’s Guide Introduction:

Hello, finance enthusiasts! Ready to dissect the financial logistics of FedEx in 2022? Dive into "FedEx 2022: Beginner's Guide to Financial Analysis," your essential resource from Quality Business Consultant, penned by financial expert Paul Borosky, MBA. This guide isn't just a rundown of numbers; it's your detailed map to navigating the fiscal landscape of one of the leading global logistics companies!

Why You'll Love This Guide:

  • Guidance from a Finance Pro: 🎓 Explore FedEx's 2022 financials with Paul Borosky, MBA, offering a guided tour courtesy of Quality Business Consultant.
  • Summary Financials for FedEx: 📉 Analyze FedEx's income statements and balance sheets for 2023, gaining insights into the company's financial health.
  • Detailed Financial Ratio Breakdown: 🧮 Decode over twenty essential financial ratios to get a comprehensive view of FedEx's fiscal standing.
  • Financial Terminology Simplified: 📚 Our "In other words" sections translate complex financial terms into clear, engaging explanations.
  • Personalized Analysis Tips: 💡 Apply Paul's specialized tips to enhance your financial analysis skills, perfect for academic and professional growth.
  • Extended Insights with Comprehensive Report: 🔍 For a more thorough analysis, our "Financial Analysis & Report" offers an in-depth look at FedEx, integrating AI insights with Paul Borosky's expert analysis.

Guide Highlights:

  • Accessible Legal Disclaimer.
  • An engaging Forward to set the stage for your financial exploration.
  • Comprehensive exploration of Income Statements and Balance Sheets for 2022.
  • Thorough investigation of Financial Ratios, enriching your analytical skill set.
  • A treasure trove of financial insights waiting for you!

Table of Contents Sneak Peek:

  • Income Statement Analysis: Navigating through revenues, costs, and operational nuances
  • Balance Sheet Examination: Assessing assets, liabilities, and equity – the fundamentals of financial health
  • Financial Ratios Decoded: Equipping you with the knowledge to evaluate FedEx's financial pulse

Who's This For?

Designed for ambitious business students and aspiring entrepreneurs, this guide is your express route to mastering financial analysis, with FedEx as your focus.

Access Your Guide:

Boost your financial understanding with "FedEx 2023: Beginner's Guide to Financial Analysis." Turn complex financial statements into actionable business insights.

Additional Note: This guide is crafted to establish a foundational understanding of vital financial concepts, centering on income statements, balance sheets, and important financial ratios for their analysis. It presents a summarized overview of FedEx's financials, providing you with targeted data, calculations, and ratios for your analysis endeavors. While the guide equips you with analytical tools, the in-depth financial journey is yours to undertake. For those seeking an exhaustive, company-specific financial overview, our "Financial Analysis & Report" delivers detailed insights, combining AI precision with Paul Borosky, MBA's experienced evaluation.


Paul, MBA.

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FedEx: Brief Summary

FedEx (FDX) is a global courier and delivery services company headquartered in Memphis, Tennessee. It operates in the integrated freight and logistics industry, primarily serving the industrial sector. With approximately 500,000 full-time employees, FedEx is one of the largest employers in the transportation and logistics industry. The company offers various services, including express delivery, ground transportation, freight forwarding, and e-commerce solutions. FedEx operates an extensive network of distribution centers, hubs, and delivery vehicles, enabling efficient and reliable transportation of packages and goods worldwide. Known for its distinctive purple and orange branding, FedEx has established itself as a leader in the logistics industry, providing reliable and timely delivery services to businesses and consumers globally.

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 pays quarterly dividends and a dividend yield of 1.64%.  His current beta is 1.33.  This indicates that the organization’s stock is slightly to moderately riskier than 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.  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 summarize FedEx's significant income statement line item trends in most cases.

Importance of Understanding FedEx’s Income Statement for Financial Analysis

Understanding FedEx's income statement is crucial for conducting a comprehensive company financial analysis. The income statement provides valuable insights into the company's revenue, expenses, and profitability, allowing investors, analysts, and stakeholders to evaluate its financial performance and make informed decisions. By analyzing FedEx's revenue figures, one can assess its ability to generate income from its core operations, such as package delivery and logistics services. Revenue growth trends can indicate market demand, customer retention, and competitive positioning.

Examining Cost Structure and Efficiency: Analyzing Expense Categories in FedEx's Income Statement

Examining the various expense categories in the income statement, such as operating, fuel, and labor expenses, helps stakeholders understand the company's cost structure and efficiency. It enables the evaluation of cost management strategies and potential risks to profitability. Profitability ratios, such as gross and net profit margins derived from the income statement, provide insights into FedEx's ability to generate profits and control costs. These ratios allow for comparisons with industry peers and historical performance.

Additionally, the income statement facilitates trend analysis by comparing financial data over different periods. This helps identify growth patterns, cost fluctuations, and potential risks or opportunities. Understanding FedEx's income statement enables stakeholders to assess its revenue generation, expense management, and profitability, aiding in investment decisions, performance evaluation, and strategic planning.

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 continually taking steps to increase market share for the firm.  From an investor’s perspective, this is a good trend.

Analyst Grade: A

FedEx 2022 Summary Income Statement

Column1 2022 2021 2020 2019 2018
Revenues                    93,512                    83,959                    69,217                    69,693                      65,450
COGS                    37,317                    32,039                    27,227                    26,737                      22,017
Gross Profit                    51,920                    41,990                    42,956                      43,433
SG&A                    32,058                    30,173                    25,031                    24,776                      23,795
Depreciation                      3,970                      3,793                      3,615                      3,353                        3,095
R & D                            -                            -                            -                            -                             -
Other                            -                             -
Total Operating Expenses                    87,267                    78,102                    66,800                    65,227                      61,178
EBIT                      6,245                      5,857                      2,417                      4,466                        4,272
Other Income
Interest Expense                         689                         793                         672                         588                           558
EBT                      4,896                      6,674                      1,669                         655                        4,353
Taxes                      1,070                      1,443                         383                         115                         (219)
Net Income                     3,826                     5,231                     1,286                        540                      4,572


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.

Importance of Understanding FedEx’s Balance Sheet for Financial Analysis

Understanding FedEx's balance sheet is crucial for financial analysis as it provides key insights into the company's financial health and stability. The balance sheet presents a snapshot of FedEx's assets, liabilities, and shareholder's equity at a given time, allowing analysts to evaluate its liquidity, leverage, and overall financial position. Analysts can assess the company's solvency and ability to meet its short-term and long-term obligations by examining the balance sheet. The composition of assets and liabilities provides information on FedEx's capital structure, debt levels, and funding sources. This knowledge aids in evaluating the company's risk profile and capacity to generate future cash flows.

Furthermore, the balance sheet helps analyze FedEx's efficiency in managing its assets and liabilities. Key metrics like the current ratio, debt-to-equity ratio, and return on assets can be derived from the balance sheet, providing valuable insights into the company's operational effectiveness and financial performance. A comprehensive understanding of FedEx's balance sheet allows for a thorough financial analysis, enabling investors, creditors, and stakeholders to make informed decisions about the company's prospects, stability, and valuation.

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 than 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 than sales. 

Analyst Grade: B


FedEx 2022 Summary Balance Sheet

Column1 2022 2021 2020 2019 2018
Cash                        6,897                    7,087                    4,881                    2,319                    3,265
Short Term Investment                              -                         -                         -                         -                         -
Account Receivable                      11,863                    7,087                    4,881                    9,116                    8,481
Inventory                           637                       587                       572                       553                       525
Current Assets                    20,365                20,580                16,383                13,086                13,341
Net PPE                      38,091                  35,752                  33,608                  30,429                  28,154
Goodwill                        6,544                    6,992                    6,372                    6,884                    6,973
Total Assets                    85,994                82,777                73,537                54,403                52,330
Accounts Payable                        4,030                    3,841                    3,269                    3,030                    2,977
Accrued Expense                        2,531                    2,903                    1,569                    3,278                    3,131
Accrued Taxes
Notes Payable
LT Debt - Current                             82                       146                         51                       964                    1,342
Total Current Liabilities                      14,274                  13,660                  10,344                    9,013                    9,627
LT Debt                      20,182                  20,733                  21,952                  16,617                  15,243
Total Liabilities                    61,055                58,609                55,242                36,646                32,914
Common Stock                        3,744                    3,513                    3,388                    3,231                    3,117
Treasury                      10,484                    8,430                    9,162                    9,289                    7,978
Retained Earnings                      32,782                  29,817                  25,216                  24,648                  24,823
Total Equity                    24,939                24,168                18,295                17,757                19,416
Total Equity & Liability                    85,994                82,777                73,537                54,403                52,330

Section 3: FedEx Financial Ratios Analyzed

I have chosen several different financial ratios for this section to review for FedEx.  In reviewing each of their financial ratios, I first start by 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. 

Importance of Understanding FedEx’s Financial Ratios for Financial Analysis

Understanding FedEx's financial ratios is crucial for financial analysis as they provide a deeper understanding of the company's performance, efficiency, and profitability. Financial ratios allow analysts to compare aspects of FedEx's financial statements, facilitating meaningful insights and informed decision-making. Ratios such as liquidity ratios (e.g., current ratio, quick ratio) help assess FedEx's ability to meet short-term obligations and manage its working capital effectively. These ratios indicate the company's liquidity position and its capacity to handle unexpected financial challenges.

Unveiling FedEx's Profitability and Return: Insights from Financial Ratio Analysis

Profitability ratios (e.g., gross profit margin, net profit margin) shed light on FedEx's ability to generate profits from its operations. These ratios provide insights into the company's pricing strategy, cost management, and profitability. Additionally, financial ratios such as return on assets (ROA), return on equity (ROE), and return on investment (ROI) measure FedEx's ability to generate returns for its shareholders and investors. These ratios indicate the company's efficiency in utilizing its assets to generate profits and create value.

Analysts can identify trends, strengths, and areas of improvement within FedEx's financial performance by analyzing these financial ratios over time and comparing them to industry benchmarks or competitors. This information is valuable for investors, stakeholders, and management to assess the company's financial health, make investment decisions, and formulate strategies for growth and sustainability.

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 will be more in line with other multinational organizations, which will drive to achieve a 1.0 current ratio.  However, investors should not hold their breath for this achievement if their previous performance is any indicator.  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