Managerial Finance - Financial Performance: UPS vs FedEx Report

This report presents a comparative financial analysis of UPS and FedEx, evaluating their performance based on various financial factors and operational successes. The analysis, conducted using financial ratios and market data, reveals that UPS demonstrates superior performance in terms of revenue and income growth, asset utilization, and operational efficiency, positioning it as the exemplar of corporate excellence. The report delves into activity analysis, equity outlook, and operational success, highlighting UPS's effective marketing and pack handling capabilities, while also acknowledging FedEx's strengths in employee satisfaction. The findings underscore the importance of financial ratio analysis in assessing the overall health and market competitiveness of companies within the delivery services industry. The report concludes by identifying UPS as the more successful company based on the financial metrics and market insights presented. The analysis uses financial ratios to compare UPS and FedEx's performance, focusing on asset turnover, growth potential, and market value outlook. The report divides the analysis into five parts to provide a comprehensive understanding of the companies' financial health, growth potential, and market value outlook.

Running head: MANAGERIAL FINANCE
Managerial Finance
Name of the Student:
Name of the University:
Author Note

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Table of Contents
Identifying the company with exemplar of corporate excellence, while discussing the factor
leading to the decisions:.............................................................................................................2
Bibliography:..............................................................................................................................4

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Identifying the company with exemplar of corporate excellence, while discussing the
factor leading to the decisions:
The analysis of the financial statements has indicated that the performance of both
FedEx and UPS is considered to be appropriate, while certain elements can be evaluated for
evaluating the performance of each company. The identification of the company with
exemplar of corporate excellence are depicted with the following factors.
Financial factor:
The financial factor analysis has mainly indicated that the growth prospects of UPS
Inc. has mainly improved over the period of 6 years in comparison to FedEx. The CAGR of
UPS for revenue growth is at 17.8%, Total assets growth is at 14.00%, operating income
growth is at 35.9% and Net income growth is at 45.1%. On the other hand, the CAGR of
FedEx for revenue growth is at 36.62%, Total assets growth is at 48.86%, operating income
growth is at -6.56% and Net income growth is at -11.32%. Therefore, it can be detected that
the performance of UPS is extremely higher than FedEx on grounds of the financial factor,
where the latter’s operating income and net income growth is negative. As per the liquidity
analysis, FedEx has been detected to be supreme in comparison to UPS, which states that the
former is able to meet the creditors demand efficiently in comparison to the latter. Moreover,
the activity analysis of UPS is more efficient in comparison to FedEx, which states that the
latter invests too much in receivables and inventory assets to support its sales, while the
activities lead to debts.
Equity analysis outlook:
The equity analysis from Morningstar, Barclays, and Macquarie directly provides
information on both UPS and FedEx conditions. The information states that currently FedEx

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would experience a revenue growth of 4.5%, where the business would face favourable
demand in FY 2017, which could generate higher revenues. In the similar process, the overall
analysis of UPS has indicated that the organisation has been experiencing lower unit delivery
cost, which is boosting its profits. However, the equity analysis has showed that FedEx
improvements would be higher in comparison to UPS, as higher growth prospects in present
with its operations.
Operational success:
The analysis of the operational success has mainly indicated that the marketing
activity of UPS is relatively higher in comparison to FedEx, as it is ranked higher among the
global brands. In the similar context, UPS has effectively managed their holiday performance
system by adopting a peak provision capability. This mainly allowed UPS to improve their
pack handling capability, while FedEx witnessed a late surge of e-commerce shipments, as
their delivery system was not able to handle the on-time delivery method. However, under
employee satisfaction mechanism the FedEx has scored higher ranking than UPS, which
states that the employee in FedEx are happier.
Thus, UPS has been identified as the exemplar of corporate excellence, as they have
higher performance in financial factors, operational success, and equity analysis.

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Bibliography:
Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson
Higher Education AU.
Titman, S., & Keown, A. J. (2015). Financial management: Principles and applications.
Pearson.