Analysis of United Parcel Services (Essay Sample)
FedEx vs Ups only need to analyze UPS
Analyze at least three items on the balance sheet for your target company that would be important to an investor, and discuss whether your company’s performance related to these items appeared to be improving, deteriorating, or remaining stable. Justify your answer by going deeper than just citing percentage increases or decreases.
4. Analyze your base company’s (UPS) investing and financing activities for the most recent year as identified in the statement of cash flows, specifically identifying the two largest investing activities and the two largest financing activities. Discuss whether you agree or disagree with the investing and financing strategies that your company appears to be employing.
3.Identify 2 (two) items not included in (or derived from) the financial statements that you think would be important to someone considering whether to invest in your company.
Discuss your reasons for believing that these two items about the company would be important in making an investment decision. (Hint: you might want to consider items discussed in other business classes.)
Analysis of United Parcel Services
The parcel service industry in the United States includes two main competitors which are FedEx and UPS. American consumers have spent billions of dollars in the last decade to ship packages, parcels and overnight letters. The overall performance of UPS in recent years has been good. United parcel services, UPS focuses on the goal of enabling commerce around the world. UPS has a very strong Long-term growth runway which helps it to attract dividend growth investments. The company has been doing a great work of enriching long-term investors in the last 18 years.
Buying a stock in a company makes an individual to become a partial owner, hence making an investor be inherently interested in the profitability of a company. Therefore, in order to determine great buying opportunities, the traditional value investors love to check the price-to-earnings ratio, (Dickinson et al, 2016). An investor analyses the balance sheet since it a snapshot of the assets and liabilities of a company at a certain point in time. The three categories on the balance sheet which an investor looks at are assets, liabilities and equity. Assets are the resources that UPS controls from which the future economic benefits of the company are expected to flow. The current assets can be converted into cash within one year.
Current liabilities of a company are the obligations due within a year. Fundamental investors are always checking on the company with fewer liabilities than assets when comparing against cash flow, (Dickinson et al, 2016). UPS liabilities are few when compared to the assets, hence it is a good company for investors to have an interest in it. The UPS company does not owe more money than it brings in hence it is a very secure organization for investors. Equity is the difference between liabilities and assets. It is a representation of how much the shareholders of the company can actually claim. Investors pay attention to the retained earnings and paid-in capital under the equity section. The investors who look to invest in UPS are guaranteed better dividends.
UPS carries out periodical reviews of the existing for sale funds for signs of other momentary impairment. The reviews consider several aspects which include the degree and period to which the fair value of a security has been less than its price. It also considers the market environments and financial situations and the precise projections for the issue
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