United Parcel Service Inc (UPS)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	61.95	66.93	77.65	84.23	90.42
Receivables turnover	8.03	7.92	7.70	7.81	7.39
Payables turnover	9.14	7.92	7.40	8.09	8.32
Working capital turnover	51.88	24.46	13.11	26.23	43.45

Based on the activity ratios provided for United Parcel Service, Inc., we can derive insights into the efficiency of its operations:

1. Receivables Turnover: This metric indicates how many times a company collects its accounts receivable during a specific period. It shows that United Parcel Service has been consistent in collecting its receivables over the last five years, with a slight increase from 7.76 in 2019 to 8.11 in 2023. This suggests that the company is effective in converting its credit sales into cash.

2. Payables Turnover: The data shows a consistent payables turnover ratio of 0.00 over the past five years. This could indicate that the company pays its suppliers promptly or relies more on other forms of financing rather than trade credit.

3. Working Capital Turnover: This ratio measures how efficiently a company utilizes its working capital to generate revenue. United Parcel Service has shown fluctuations in this ratio over the years, with a substantial increase from 13.21 in 2021 to 52.36 in 2023. This suggests that the company has improved its ability to generate revenue from its current assets and liabilities.

In conclusion, United Parcel Service, Inc. has shown strong efficiency in managing its receivables turnover and working capital turnover ratios in recent years, although its payables turnover ratio has remained constant at 0.00. The company's ability to swiftly collect receivables and optimize its working capital indicates effective operational management strategies.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	5.89	5.45	4.70	4.33	4.04
Days of sales outstanding (DSO)	days	45.43	46.06	47.41	46.75	49.38
Number of days of payables	days	39.95	46.10	49.32	45.12	43.88

United Parcel Service, Inc.'s Days of Sales Outstanding (DSO) measures the average number of days it takes for the company to collect revenue from its customers. Over the past five years, the DSO has shown minor fluctuations, ranging from 45.01 days in 2023 to 47.05 days in 2021 and 2019. This indicates that the company has been relatively consistent in managing its accounts receivable and collecting payments from customers within a reasonable timeframe.

On the other hand, the Days of Inventory on Hand (DOH) metric, which reflects the average number of days it takes for the company to turn its inventory into sales, is not available for analysis in the provided data. Without this information, it is challenging to assess United Parcel Service, Inc.'s efficiency in managing its inventory levels.

Lastly, the Number of Days of Payables, a measure of how long the company takes to pay its suppliers, is also not provided in the data. This metric would have been crucial to understanding United Parcel Service, Inc.'s relationships with its suppliers and its cash management practices.

In conclusion, based on the available DSO data, United Parcel Service, Inc. appears to have a consistent track record in collecting revenue from customers. However, a comprehensive analysis of the company's activity ratios would require additional information on inventory turnover and payables turnover to provide a more holistic view of its operational efficiency.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	2.50	2.87	2.88	2.60	2.41
Total asset turnover	1.27	1.40	1.39	1.34	1.27

The fixed asset turnover ratio measures the efficiency of a company in generating revenue from its fixed assets. United Parcel Service, Inc.'s fixed asset turnover has shown a fluctuating trend over the past five years, ranging from 2.43 in 2019 to 2.91 in 2021. This ratio indicates that the company has been able to generate $2.46 in revenue for every dollar invested in fixed assets in 2023.

On the other hand, the total asset turnover ratio reflects the company's ability to generate revenue from all its assets. United Parcel Service, Inc.'s total asset turnover has also shown a slightly increasing trend over the same period, from 1.28 in 2019 to 1.28 in 2023. This implies that the company has been able to generate $1.28 in revenue for every dollar of total assets in 2023.

Overall, United Parcel Service, Inc. has demonstrated a relatively efficient utilization of both fixed and total assets to generate revenue over the past five years, with improvements in both ratios from 2019 to 2023. However, further analysis and comparison with industry peers may provide more insights into the company's long-term activity efficiency.