Asset Structure Analysis
United Parcel Service’s total assets were $70.9 billion and $71.1 billion as of December 31, 2023 and December 31, 2022, respectively.
Property, plant and equipment, net were $37 billion as of December 31, 2023, accounting for 52.2% of total assets.
Operating lease right-of-use assets were $4.3 billion as of December 31, 2023, making up 6% of total assets.
Goodwill was $4.9 billion as of December 31, 2023, consisting of 6.9% of total assets.
Intangible assets, net were $3.3 billion as of December 31, 2023, comprising 4.7% of total assets.
Total current assets were $19.4 billion at December 31, 2023, constituting 27.4% of total assets.
Among total current assets, cash and cash equivalents were $3.2 billion, marketable securities were $2.9 billion, accountable receivable, net were $11.2 billon, and other current assets were $2.1 billion.
Liquidity and Solvency
Total current liabilities were $17.7 billion as of December 31, 2023.
The current ratio was 1.1 times for 2023.
The debt ratio was 76% for 2023.
Deducting the amount of goodwill and intangible assets from total assets, the debt ratio would be more high.
We think that United Parcel Service’s cash flow can maintain huge debt.
The company ‘s net cash provided by operating activities was $10.2 billion, $14.1 billion and $15 billion for 2023, 2022 and 2021, respectively.
Profitability Analysis
United Parcel Service’s revenue was $91 billion, $100 billion and $97 billion in 2023, 2022 and 2021, respectively.
Operating profit was $9.1 billion, $13.1 billion and $12.8 billion in 2023, 2022 and 2021, respectively.
The operating profit margin was 10%, 13.1% and 13.2% in 2023, 2022 and 2021, respectively.
Net income was $6.7 billion, $11.5 billion and $12.9 billion in 2023, 2022 and 2021, respectively.
The net profit margin was 7.4%, 11.5% and 13.3% in 2023, 2022 and 2021, respectively.
Total shareowners’ s equity was $17.3 billion and $19.8 billion in 2023 and 2022, respectively.
The return on equity was 38.7%, 58.1% and 65.2% in 2023, 2022 and 2021, respectively.
Cash Flow Analysis
The company ‘s net cash provided by operating activities was $10.2 billion, $14.1 billion and $15 billion for 2023, 2022 and 2021, respectively.
You can see that the amount of the company ‘s net cash provided by operating activities has been more than that of net income.
United Parcel Service’s cash flow is very strong.
The company’s business model need a lot of fixed assets, so the amount of capital expenditures is very huge.
The amount of capital expenditures was $5.2 billion, $4.8 billion and $4.2 billion in 2023, 2022 and 2021, respectively.
The free cash flow was $5 billion, $9.3 billion and $10.8 billion in 2023, 2022 and 2021, respectively.
Purchases of common stock were $2.3 billion, $3.5 billion and $500 million in 2023, 2022 and 2021, respectively.
Dividends was $5.4 billion, $5.1 billion and $3.4 billion in 2023, 2022 and 2021, respectively.
The combined amount of stock purchases and dividends was $7.7 billion, $8.6 billion and $3.9 billion in 2023, 2022 and 2021, respectively.
United Parcel Service’s operating performance for Q1 2024
United Parcel Service’s revenue was $21.7 billion and $23 billion in Q1 2024 and Q1 2023, respectively.
The revenue in Q1 2024 was down 6% year-on-year.
Net income was $1.1 billion and $1.9 billion in Q1 2024 and Q1 2023, respectively.
Conclusion
To be conservative, we reckon that United Parcel Service’s reasonable valuation is about $80 billion, while the company ‘s market capitalization is $116 billion.
Disclaimer: The content is for reference only and does not constitute investment advice.
United Parcel Service‘s 2023 form 10k
United Parcel Service’s Q1 2024 form 10Q
Introduction
United Parcel Service, Inc. (“UPS”), founded in 1907, is the world’s premier package delivery company and a leading provider of global supply chain management solutions. We offer a broad range of industry-leading products and services through our extensive global presence. Our services include transportation and delivery, distribution, contract logistics, ocean freight, airfreight, customs brokerage and insurance.
We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS brand. We deliver packages each business day for approximately 1.6 million shipping customers to 10.2 million delivery recipients in over 200 countries and territories. In 2023, we delivered an average of 22.3 million packages per day, totaling 5.7 billion packages during the year. Total revenue in 2023 was $91.0 billion.
