Financial Statement Analysis of FedEx and UPS(United Parcel Service, Inc.) Report

Running head: CASES IN FINANCE
Cases in finance
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CASES IN FINANCE
Executive Summary
The project aims at conducting a financial statement analysis by examining various data
presented by the two companies, which are FedEx and UPS. The report covers the data
concerning two different years which are 2017 and 2018. Both the companies are considered as
global leaders in the industry providing services related to the logistics. Any financial analysis is
incomplete without using the advantages of the different financial ratio which are liquidity ratio,
efficiency ratio, gearing ratio, profitability ratio and market or valuation ratio. United Parcel
Services and Federal Express are included in the North America Industry Classification System
(NAIC) list and the code is 492110. The project concludes which of the two companies is better
than the other in their business strategies by looking at the financials of the companies.

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CASES IN FINANCE
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
About FedEx Corporation............................................................................................................3
About United Parcel Service, Inc................................................................................................4
Comparison of business structure................................................................................................4
Elements of Risk for both the companies....................................................................................5
Ratio Analysis..............................................................................................................................6
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

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CASES IN FINANCE
Introduction
FedEx and UPS are the two business belonging to the same industry. Both companies are
the top leading companies and are competing with each other for several years. These companies
are sometimes similar in their business strategies but sometimes they differ too. This is because
the business model differs in both companies. The logistics services, ground deliveries or aircraft
freight etc. are different services offered by the two companies. FedEx is known for its aircraft
freight while UPS is known for its ground deliveries. But it cannot be concluded that FedEx
doesn’t have the ground deliveries because it has a separate segment for this which is generating
revenue for the company as well. Similarly, UPS has aircraft freight business which is one of the
profitable segment of the company. The detailed analysis of the financials of the company can
tell the accurate difference in the strategies of both the companies. The comparison of the
financial statements is next to impossible without using financial ratios. The different financial
ratios will help to overview the performance of both companies. The major financial ratios which
financial analysts use for doing the financial analysis of the financial statements of the company
are current liquidity ratio, operating ratio, gearing ratio, profitability ratio and performance ratio.
There are several ratios covered under this subcategory of financial ratios. The recent trends of
logistics management can be seen in the business approaches of the two business. These
companies know the importance of innovation and upgrading the business always. This is the
reason why both of these companies have become the market leaders in the industry they are
operating.
Discussion
About FedEx Corporation
FedEx Corporation is a business which is registered under NYSE as FDX. The company
was founded in the year 1973. The headquarters of the company are established in Memphis,
Tennessee. The business activities of the company include e-commerce and transportation
services to its customers (Wetherbe 2016). The company has more than 4.5 lakh employees who
working collectively and providing safe and high standard services to the customers. This has
made the company on the list of top-ranking companies under its field of operations. FedEx is
the abbreviation for Federal Express. The business segments of the FedEx corporation are FedEx
Ground, FedEx Freight, FedEx Services and FedEx Express. The services of this corporation