In financial analysis of the two companies, raw data was taken from Google Finance and ratio calculations were performed using Excel. The data for UPS was presented for the quarter ending in September 2011, while for FedEx, it was for the quarter ending in November 2011.
| UPS | FDX | |
| 2011 Close Price | 73.19 | 83.51 |
| 2011 Open Price | 73.18 | 93.54 |
| Market Cap (Billion) | 70.63 | 26.26 |
| P/E Ratio | 17.77 | 15.18 |
| EPS | 4.12 | 5.50 |
| Latest Quarterly Data in Millions | ||
| Total Revenue | 13,166 | 10,587 |
| Cost of Revenue | 9,829 | 7,892 |
| Net Income | 1,042 | 497 |
| BOP Cash | 4,691 | 1,959 |
| EOP Total Receivables | 5,584 | 4,837 |
| BOP Total Current Assets | 12,950 | 7,963 |
| BOP Net PPE | 17,489 | 15,820 |
| BOP Total Assets | 35,152 | 27,838 |
| EOP Accounts Payable | 1,974 | 1,646 |
| BOP Total Current Liabilities | 7,618 | 4,981 |
| BOP Total Debt | 12,161 | 1,668 |
| BOP Total Liabilities | 26,898 | 12,124 |
| BOP Total Equity | 8,254 | 15,714 |
Notable differences include the market capitalization, in which UPS nearly three-folds FedEx. Nevertheless, the size of the companies as measured by revenue or total assets doesn't differ drastically. In terms of total equity, FedEx's value actually almost doubles that of UPS. For better understanding, ratio analysis was conducted:
| Annualized Ratio Analysis | ||
| UPS | FDX | |
| Returns on Equity | 50.50% | 12.65% |
| Profit Margin | 7.91% | 4.69% |
| COGS Margin | 74.65% | 74.54% |
| Asset Efficiency Ratio | 149.82% | 152.12% |
| Return on Assets | 11.86% | 7.14% |
| Fixed Asset Efficiency | 301.13% | 267.69% |
| AR Turnover | 10.60% | 11.42% |
| AP Turnover | 5.02% | 5.21% |
| Cash Level | 8.91% | 4.63% |
| Debt to Asset Ratio | 34.60% | 5.99% |
| Debt to Capitalization Ratio | 59.57% | 9.60% |
| BOP Current Ratio | 169.99% | 159.87% |
UPS nearly doubles FedEx in terms of profit margin, despite similar COGS margin, asset efficiency levels, and comparable levels of sales. But drastically different for the companies is debt. The debt level of UPS is nearly 7-fold that of FedEx. As a result, debt to asset and debt to capitalization ratios are significantly higher for UPS. Despite the higher level of debt, UPS has a higher current ratio and cash levels, illustrating its sound liquidity. Furthermore, given that profits and equity levels have been solidly positive, carrying debt shouldn't be a great concern for UPS. The high level of debt is directly reflected in the higher liability and lower equity values for UPS. As a result of the lower equity, UPS features higher returns to equity (ROE) values.
While FedEx saw its stock price decrease in 2011, UPS barely saw any change. Both companies should see growth as the earnings from Q4 come out and reflect on the increased earnings over this year's Holiday season. Both companies are also likely to remain in close watch as financial troubles continue to plague USPS.
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