LCBB6002 International Financial Management: UPS Analysis & Review

This report provides a comprehensive analysis of United Parcel Service (UPS) within the context of international financial management. It critically evaluates UPS's dividend distribution policy, examining the dividend yield, payout ratio, and historical dividend adjustments. The report also analyzes the efficient market hypothesis (EMH) in relation to UPS's operations, considering factors such as market share, e-commerce growth, and logistical technologies. Furthermore, it evaluates UPS's methods of appraising projects, focusing on cost-benefit analysis and its application in transportation planning. The report references various academic sources and online resources to support its analysis and conclusions.

International Financial
Management

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Critically analyses and evaluate chosen multinational corporation’s dividend distribution policy..........3
Critically analyse the efficient market hypothesis theory in the context of your chosen multinational
corporation’s operations.........................................................................................................................5
Critically analyse and evaluate your chosen multinational corporation’s methods of appraising
projects....................................................................................................................................................6
REFERENCES................................................................................................................................................8

INTRODUCTION
The research of financial relations between multiple countries is known as international
finance. Foreign direct investment and monetary system currency markets are among the topics
covered by international finance. The relevance of global banking has grown as a result of
growing globalization. This report based on the United Parcel Service (UPS, stylised as ups) is a
worldwide transshipment and inventory control corporation headquartered in the United States. It
was formed in 1907. UPS began as the United Messenger Firm, a telegraph corporation, and has
since evolved becoming a Successful business and one of the nation's biggest transportation
services. UPS will be the nation's biggest messenger firm by income in 2020, with yearly
revenue of roughly US$85 billion, above of rivals DHL and FedEx. In this report consist of
dividend distribution policy and analysis efficient market hypothesis theory in the context of
UPS. In addition evaluate multinational corporation’s methods of appraising projects.
MAIN BODY
Critically analyses and evaluate chosen multinational corporation’s dividend distribution policy
The UPS dividend yield is 2.5 percent depending on the present company's stock of UPS.
The UPS payout ratio is large. It is approaching the intended dividend yield objective of 3 to 5%.
UPS distributes dividend each 3 months or four times a year. UPS distributes dividends in the
months of March, June, July, and December each year. Several American businesses follow this
income distribution strategy. The corporation has a longstanding experience of increasing its
dividend every year. Since 2010, the UPS dividend has been adjusted on a yearly basis. It's
possible that the yearly rise streak may continue for a long time. However, in 2009, the
corporation put a halt to dividend increases. It did so in order to get through the hardships of the
downturn at the moment.
A purchaser must consummate their acquisition of UPS shares well before ex-dividend
date in order to be granted the next UPS annual dividend. The UPS former date is usually all
around 20th of the month before dividends are paid. UPS's latest current dividend rise was only
1%. On August 20, 2021, United Parcel Service, Inc. (UPS) will cease trading ex-dividend. On
Sept 9, 2021, the company will issue a dividend payment of $1.02 per shares. The cash special
dividend is available to UPS investors who acquired the stock before the ex-dividend date. UPS

has awarded this very same dividend for the third quarter in a row. The payout ratio is 2.09
percent at the value of the stock of $194.8. UPS's latest selling was $194.8, down -11.29 percent
from the 52-week high of $219.59 and up 25.98 percent from the 52-week low of $154.63.
Statics for 5 years
Compound Annual Dividend growth
Dividend payout history of UPS
Dividends are traditionally paid from a firm ’s earnings, so if it gives out much more than earns,
the dividends is more likely to be decreased. That year, United Parcel Service handed out 58

percent of its revenues to shareholders, which is typical for most corporations. A further
examination may be to see if United Parcel Service earned adequate free cash flow to pay its
dividend. However, it only handed out 43% of its net income in the previous quarter. It's nice to
see both income and working capital support the dividend. This shows that the dividend will be
sustained as provided as profits do not fall dramatically.
Critically analyse the efficient market hypothesis theory in the context of your chosen
multinational corporation’s operations
The efficient market hypothesis (EMH), often referred as the efficient market hypothesis,
asserts that asset values represent all existing knowledge and that persistent alpha production is
unlikely. Companies constantly move at their fair value on marketplaces, as per the EMH,
making it very difficult for buyers to invest cheap shares or buy for ridiculous prices. As a result,
skilled taking orders or timing the market should be difficult to exceed the entire market, and the
only way an individual can earn better returns is to buy hazardous investments.
UPS has a Buy assessment based on a $129.47 price target, which is a 23.3 percent level of
security over the trading price of $104.99 per share on April 7, 2017. Three reasons have
influenced our suggestion the most:
1. High obstacles to entrance into the sector - UPS has a 57 percent market share in home
couriers and delivery companies, compared to FedEx and USPS, which are its two primary
rivals.
2. E-commerce and medical transportation development — UPS is poised to benefit from of the
spike in e-commerce both locally and globally, resulting in greater revenue and profit.
Similarly, its recent purchases in the medical logistics area will allow it to profit from the global
biologics industry's expansion.
3. Cost-effective innovation in the field — UPS's ORION logistical technologies will try to
lower expenses, enhance profits, and broaden the scope of its logistical solution company
throughout its Supply Chain and Warehousing Services division.

United Parcel Service, Inc. (UPS) is up about 4% in pre-market trade on Tuesday after exceeding
profit projections for the fourth quarter of 2020 by a large edge. As during quarter, the business
earned $2.66 per shares, $0.52 above than estimates, while sales increased 21.0 percent
annualized to $24.9 billion, much beyond the $22.8 billion average. Due to the unpredictable
caused by the epidemic, no advice for 2021 was provided, and no share repurchases are planned
for the year. In 2013, the company pushed out among the 2004 high of $89.11, launching a
choppy rise that culminated in a peak of $114 in the first quarter of 2015. It fell to a 2 different
bottom at the beginning of 2016, but turned higher after attempting to break out in November. A
second breakout effort in the first quarter of 2018 failed, unleashing an investor outflow that cut
actually supported and worse lows until the seven-year low in March 2020.
In August, a vertical bounce hit the 2018 high of $135.53, prompting a quick
breakthrough to an all-time high of $178.01 in October. A few days later, the stock fell into the
$150s, creating range resistance that has already been effectively tested. The pre-market
upswing, on the other hand, is already reaching opposition around the 50-day exponentially
weighted (EMA), which might restrict advances in the following segments. That's hardly
unexpected, given that stockpiles had dropped to six-month lows advance of the announcement.
Critically analyse and evaluate your chosen multinational corporation’s methods of appraising
projects
Whenever a company wants to discover solutions to a particular management issue and
determine the best approach to put that approach into action, it must plan and construct projects
that will give an effective strategy for solving the issues and putting the answer into action. This
organisation will need to assess the possible project to ensure that it is truly successful in terms

of supporting the satisfactory answer and resolving the issue. Project assessment management is
a significant method of reviewing and assessing the program in this context. Discounted
methodologies for project assessment include (a) Net Present Worth (b) Cost Benefit Ratio, (c)
Internal Rate of Return and (d) Sensitivity Analysis, which take into consideration the time value
of currency.
United parcel service use cost benefits analysis for appraised their project in effective
manner. Most of the transportation companies use this method because it provides accuracy to
understand project in broad way. For evaluating proposed transportation projects, cost-benefit
analysis has become a commonly utilized and very well methodology. This study gives our
perspective on the function and placement of CBA in the transportation planning process in UPS,
which is partially based on a research of many nations where CBA has a defined significance in
judgment. According to the report, methodology, values, and possible applications are essentially
comparable across nations. The CBA results are included into a complete assessment procedure
that encompasses various sorts of non-monetized payments in UPS. CBA has a number of
benefits, including the struggle to transcend mental, physical, and procedure constraints and
prejudices in judgment. The socioeconomic and legal environment is some of the most
significant obstacles to CBA and independent economic in particular. CBA frequently runs the
danger of arriving too early in the planning phase to have a significant impact. Whenever
planning activities are focused around with a perceived "issue," this risk appears to rise.
Although expensive remedies may be considered as better than nothing unless situation is
deemed serious sufficient, regardless of the fact that the definition of "issue" is sometimes
subjective.

REFERENCES
Books and Journal
Siriopoulos, C., 2021. Financial Markets are Not Efficient: Financial Literacy as an Effective
Risk Management Tool. The International Journal of Business and Management
Research, 9(1), p.65.
Bolzan, G. and et..al, 2020. Enseñanza de ciencias contables y el proceso de convergencia a las
international financial reporting standards. REVISTA AMBIENTE CONTÁBIL-
Universidade Federal do Rio Grande do Norte-ISSN 2176-9036, 12(1).
Banerjee, A. and et.al, 2020. E-governance, accountability, and leakage in public programs:
Experimental evidence from a financial management reform in india. American
Economic Journal: Applied Economics, 12(4), pp.39-72.
Abuselidze, G., 2021. The Impact of Banking Competition on Economic Growth and Financial
Stability: An Empirical Investigation. European Journal of Sustainable
Development, 10(1), pp.203-203.
Ercegovac, R., Klinac, I. and Zdrilić, I., 2020. Bank specific determinants of EU banks
profitability after 2007 financial crisis. Management: Journal of Contemporary
Management Issues, 25(1), pp.89-102.
Online
Compound annual dividend growth, 2021. [Online]. Available through; <
https://dividendsdiversify.com/ups-stock-dividend-analysis/>
Dividend payout history, 2021. [Online]. Available through;
<https://a2-finance.com/en/issuers/united-parcel-service/dividends>