Ups Financial Analysis

United Parcel Service’s is doing well with its performance in comparison to the industry competitors. Currently, UPS controls 51% of market share revenue related to domestic ground and air package delivery. Its competitors, FedEx control 26%, and U.S. Postal Services controls 17% (Appendix). Revenue also increased from $943 million in 1994 to $1,741 million in 1998. When examining the ratios for UPS we can say that the company is doing extremely well from 1997 to 1998. ROE increased by 9.34%, ROA also increased by 4.49%, and gross profit margin increased by 4.9%. This indicates that UPS is effectively using shareholders investments and efficiently using its asset to generate net income. Current ratio increased by .14% showcasing UPS has more

Overall the business is financially strong as the ratio analysis shows improvements. (Refer to Appendix B)

When examining UPS, it can be said that the following factors listed below are the key drivers of its performance. When it first began operations UPS highlighted the importance of innovation as they were the first company, in 1920, to introduce the “mechanical sorter and conveyer belt system”. Infrastructure is also another important factor for UPS because from 1988 to 1999, they spent $1 billion annually making improvements to it. The improvements allow UPS to “track packages precisely, deliver electronic proof of delivery, and manage shipments on-line.” The improvements allow UPS to handle 6 times more online tracking requests compared to its competitor FedEx. It’s

From its beginning operations in 1907, to 1999, it has made enhancements to its infrastructure and also has developed the UPS Logistic Group. From being recognized as “Company of the Year” by Forbes magazine and the “World’s Most Admired Global Mail, Package and Freight Delivery Company” by Fortune magazine, UPS has become a dominate company in the delivery and package industry. There are three emerging factors in the market have arisen that will help UPS’s management align and grow the corporation in the future by providing new opportunities; globalization, e-commerce, and supply chain management. Globalization will help UPS sustain future performance because it was able to expand its operations from Seattle, Washington, to non-U.S markets like Europe, Asia and Latin America. As mentioned by John Alden. Vice chairman of UPS, “In the package delivery industry, globalization means that we must knit together worldwide distribution networks that match our customers’ geographic operations. If we don’t, our competitors will.” Opening its arms to international markets will help its strategic goals. Furthermore, E-Commerce will help UPS because online purchasing is a rising trend exceeding catalogue sales. UPS currently has partnerships with retailers online such as e-Bay and is considering ways to improve their relationship. Currently UPS is implementing “Return on the Web”, which will allow customers from the comfort of their