UPS Financial Statements and Financial Ratios Analyzed from 2015 to 2019

Expert UPS Financial Report & Analysis by Paul Borosky, MBA.

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Hey All,

Thanks for visiting my UPS Financial Report page. On this page, you will be able to find preliminary information about UPS current financial performance as well as some historical track records and trends. 

For a more detailed examination of UPS financial performance, please check out the "Financial Report".  In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:

  • Summarized income statement for the last 5 years.
  • Summarized balance sheet for the last 5 years.
  • Summary analysis by myself of important income statement, balance sheet, and financial ratio trends and other happenings.
  • Five year’s worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
  • Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
  • Professional financial analysis tips provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is were I use plain English to explain concepts.

Enjoy the preliminary information and for a more detailed analysis, buy the financial report!

Sincerely,

Paul, MBA.

Sample Financial Report

Sample Financial Report by Paul Borosky, MBA.
Financial Report Sample 2

Sample Table of Contents for Financial Reports

Table of Contents

Page Count: 88 Pages

  • Disclaimer 3
    Acknowledgments 4
    Forward 5
    About the Author 7
    Company Summary 8
    Financial Statement Introduction 10
    Income Statement 11
    Walmart’s Income Statement – Summary Analysis 12
    Income Statement Discussion 12
    Balance Sheet 21
    Balance Sheet – Summary Analysis 22
    Balance Sheet Discussion 23
    Financial Ratios 38
    Liquidity Ratios 39
    Liquidity Ratios - Summary Analysis 39
    Liquidity Ratios Discussion 40
    Current Ratio 40
    Quick Ratio 41
    Cash Ratio 42
    Other Liquidity Ratios 42
    Net Operating Working Capital 42
    Asset Ratios 44
    Asset Utilization Ratios - Summary Analysis 45
    Asset Utilization Ratios Discussion 46
    Total Asset Turnover 46
    Fixed Asset Turnover 46
    Days Sales Outstanding 47
    Inventory Turnover 48
    Accounts Receivable Turnover 49
    Accounts Payable Turnover 50
    Other Asset Ratio Calculations 50
    Working Capital Turnover 50
    Average Days in Inventory 51
    Average Days Payable 51
    Profitability Ratios 52
    Profitability Ratios - Summary Analysis 53
    Profitability Ratios Discussion 53
    Return on Assets (ROA) 53
    Return on Equity (ROE) 54
    Profit Margin 55
    Gross Profit Margin 56
    Operating Profit Margin 56
    Basic Earnings Power 57
    ROCE 57
    Capital Employed 58
    Debt Ratios 59
    Walmart’s Debt Ratios - Summary Analysis 59
    Debt Ratios Discussion 60
    Long-Term Debt Ratio 60
    Debt to Equity Ratio 61
    Times Interest Earned 61
    WACC 63
    Book Value of WACC 63
    Free Cash Flow (FCF) 65
    Free Cash Flows – 2016 - 2020 65
    Free Cash Flows – 5 Year Projections 66
    Income Statement – Projections for 5 years 67
    Income Statement – 5 Year Projections 67
    Balance Sheet – Projections for 5 years 68
    Balance Sheet – 5 Year Projections 68
    Company Valuation and Intrinsic Stock Price 70
    Appendix 1: Summarized Income Statement 71
    Appendix 2: Income Statement – Percent of Sales 72
    Appendix 3: Income Statement – Year over Year Growth 73
    Appendix 4: Summarized Balance Sheet 74
    Appendix 5: Balance Sheet as Percent of Total Assets 76
    Appendix 6: Summarized Financial Ratios 77

United Parcel Service (UPS) Brief Summary

UPS has its global headquarters in Atlanta, Georgia.  The organization competes in the industrial sector of the economy.  Specifically, UPS competes in the integrated freight and logistics industry.  Based on industry research, the company currently employs almost 261,000 individuals.  The main generator for revenues of the company would be there package delivery service.  At present, UPS has a presence in a multitude of areas like the United States, South America, Africa, the Middle East, and Europe.

From a financial perspective, UPS has a market capitalization of $101 billion.  Their beta is .85.  This indicates that UPS stocks are well below overall market risk.  In the last 12 months, the company has paid out a dividend yield of 3.42%.  In contrast to other multi-national corporations, UPS pays out dividends semiannually as compared to quarterly.  The company’s 52-week stock price range has fluctuated between $82-$125 and $0.31.

UPS Financial Report Sources

“UPS 2019 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 UPS 2018 10k, 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and 2019 10k annual report as the basis for information gathering. 

Section 1: UPS Income Statement Analyzed 2015 to 2019

In this section, I walk through a broad definition as to what an income statement is and why it is important.  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 UPS important income statement line item trends from 2015 to 2019, in most cases.

UPS Revenue Growth.

UPS ended 2015 with revenues of approximately $58.3 billion.  In the next several year's company UPS would continually increase the revenues ending 2019 at $74 billion.  This continued growth rate shows that the organization is able to adapt to a continually changing environment, specifically, new competitors entering the market like Amazon.

UPS Income Statement 2019

Column1 2019 2018 2017 2016 2015
Revenues                    74,094                    71,861                    66,585                    60,906                      58,363
COGS                    15,879                    16,836                    14,386                    11,247                      10,525
Gross Profit                    58,215                    55,025                    52,199                    49,659                      47,838
SG&A                    38,908                    37,235                    34,577                    34,770                      31,028
Depreciation                      2,360                      2,207                      2,282                      2,224                        2,084
R & D                            -                            -                            -                            -                             -
Other
Operating Expenses                    66,296                    64,837                    59,056                      4,623                        4,636
EBIT                      7,798                      7,024                      7,529                      5,467                        7,668
Other Income
Interest Expense                         653                         605                         453                         381                           341
EBT                      5,652                      6,019                      7,137                      5,136                        7,342
Taxes                      1,212                      1,228                      2,232                      1,705                        2,498
Net Income                     4,440                     4,791                     4,905                     3,431                      4,844

Section 2: UPS Balance Sheet Analyzed from 2015 to 2019

For UPS balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define their balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019.  Next, I then offer a summary analysis of their important balance sheet line items.

UPS Cash.

In 2015, UPS ended the year with $2.7 billion in cash.  In the next year, the company would increase their cash position slightly to $3.4 billion.  However, in 2017, the cash with position would fall slightly to 3.3 billion only to grow substantially to $5.2 billion in 2019.  The fluctuation in the cash position may indicate that executives do not have a working business model in relations to how much cash is needed for operations and buffering.

UPS Summary Balance Sheet 2019

Column1 2019 2018 2017 2016 2015
Cash                        5,238                    4,225                    3,320                    3,476                    2,730
Short Term Investment                           503                       810                       749                    1,091                    1,996
Account Receivable                        9,552                    8,958                    8,773                    7,695                    7,134
Inventory
Other
Current Assets                    17,103                16,210                15,548                13,849                13,208
Net PPE                      30,482                  26,576                  22,118                  18,800                  18,352
Goodwill                        3,813                    3,811                    3,872                    3,757                    3,419
Other
Total Assets                    57,857                50,016                45,403                40,377                38,311
Accounts Payable                        5,555                    5,188                    3,872                    3,042                    2,587
Accrued Expense                        2,552                    3,047                    2,521                    2,317                    2,253
Accrued Taxes
Notes Payable
LT Debt - Current                        3,420                    2,805                    4,011                    3,681                    3,018
Other
Total Current Liabilities                      15,413                  14,087                  12,708                  11,730                  10,696
LT Debt                      21,818                  19,931                  20,278                  12,394                  11,316
Other
Total Liabilities                    54,574                46,979                44,373                39,948                35,820
Common Stock                           150
Treasury                             26                         32                         37                         45                         51
Retained Earnings                        9,105                    8,006                    5,858                    4,879                    6,001
Other
Total Equity                       3,283                  3,037                  1,030                      429                  2,491
Total Equity & Liability                    57,857                50,016                45,403                40,377                38,311

Section 3: UPS Financial Ratios Analyzed from 2015 to 2019

For this section, I have chosen several different financial ratios to review for UPS from 2015 to 2019.  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. 

UPS Current Ratio.

UPS ended 2015 with the current ratio of 1.23.  This at the current ratio is slightly above 1.0 that is the gold standard for most companies.  Because the organization does continually receive an influx of cash from customers on a daily basis, having a lower current ratio may indicate optimized usage of current assets.  In the next four years, the organization’s current ratio would fluctuate between 1.22 in 2017 to a five-year low of 1.11 in 2019.  Again, and my most humble of opinions, UPS might even be able to get away with a .9 current ratio and still be considered solvent in the short term.

UPS Total Asset Turnover.

UPS's total asset turnover ended 2015 at 1.52.  In the next four years, the organization would continually reduce its total asset turnover in 2019 at 1.28.  This indicates that the organization is taken on more assets and they are not generating revenues for the organization.  To mitigate this problem, the company may want to consider liquidating fixed assets that are underutilized or even increased its dividend payout.

UPS Return on Assets.

UPS’s return on assets ended 2015 at 12.64%.  In the next year, the return on assets for UPS would fall to 8.5%.  Fortunately, this ratio would then increase in 2017 to 10.8%.  However, the most concerning trend is that in the next two years, UPS would continually reduce the return on assets and 2019 at 7.6%.  The continued fall of the company’s return on assets further highlights the need for the company to either start making more revenues on assets held or start liquidating underutilized assets.

UPS Debt ratio.

UPS ended 2015 with a debt ratio of 29.54%.  As compared to other multinational organizations, this debt ratio seems to be about par for the course.  However, in the next two years, the organization would substantially increase the debt ratio ending 2017 at 44.66%.  Fortunately, though the organization would then take steps to reduce their debt ratio ending 2019 at 37.71%.  However, even 37.71% is still a high debt ratio for UPS.  A better strategy would be for the organization to possibly use some of their current assets to pay down accumulated debt.

UPS Liquidity Ratios 2019

Ratios 2019 2018 2017 2016 2015
Current Ratio                           1.11                    1.15
Cash Ratio                           0.34                    0.30
Quick Ratio                           1.11                    1.15
Net Working Capital                         6,683                  4,948

UPS Asset Utilization 2019

Ratios 2019 2018 2017 2016 2015
Total Asset Turnover                           1.28                    1.44
Fixed Asset Turnover                           2.43                    2.70
Days Sales Outstanding                         47.05                  45.50
Inventory Turnover #DIV/0! #DIV/0!
Accounts Receivable Turnover                           7.76                    8.02
Working Capital Turnover                         11.09                  14.52
AP Turnover                         13.34                  13.85
Average Days Inventory #DIV/0! #DIV/0!
Average Days Payable                           0.04                    0.04

UPS Profitability Ratios 2019

Ratios 2019 2018 2017 2016 2015
Return on Assets 7.67% 9.58%
Return on Equity 135.24% 157.75%
Net Profit Margin 5.99% 6.67%
Gross Profit Margin 78.57% 76.57%
Operating Profit Margin 10.52% 9.77%
Basic Earning Power 13.48% 14.04%
ROCE 18.37% 19.55%
Capital Employed                       42,444                35,929
ROIC 16.48% 17.74%