United Parcel Service Inc (UPS)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	90.45	78.85	98.14	117.82	123.89
Receivables turnover	—	—	—	—	—
Payables turnover	—	—	—	—	—
Working capital turnover	31.74	52.36	24.61	13.21	25.77

Inventory Turnover:
- The inventory turnover ratio for United Parcel Service Inc has been consistently high over the years, ranging from 78.85 to 123.89. This indicates that the company is efficient in managing its inventory and converting it into sales.

Receivables Turnover:
- The receivables turnover data is not available, which may suggest that the company does not disclose this metric or has very low accounts receivable turnover.

Payables Turnover:
- Similarly, the payables turnover data is not provided, making it difficult to assess how quickly the company pays its suppliers.

Working Capital Turnover:
- The working capital turnover ratio of United Parcel Service Inc has shown fluctuations over the years, ranging from 13.21 to 52.36. This ratio indicates how efficiently the company is using its working capital to generate sales revenue. A higher ratio suggests better utilization of working capital.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	4.04	4.63	3.72	3.10	2.95
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—

Based on the provided data, let's analyze the activity ratios for United Parcel Service Inc:

1. Days of Inventory on Hand (DOH)
- The Days of Inventory on Hand measure how quickly a company is able to sell its inventory. An increase in this ratio could indicate slower inventory turnover or potential issues with managing inventory efficiently.
- The trend for United Parcel Service Inc's DOH is as follows:
- It increased from 2.95 days as of December 31, 2020, to 4.04 days as of December 31, 2024. This suggests that the company took longer to sell its inventory over this period.

2. Days of Sales Outstanding (DSO)
- The Days of Sales Outstanding ratio indicates how long it takes for a company to collect its accounts receivable. A higher DSO could signify difficulties in collecting payments from customers promptly.
- In this case, all the data points for DSO are not provided, which indicates that we cannot analyze this ratio for United Parcel Service Inc.

3. Number of Days of Payables
- The Number of Days of Payables ratio measures the number of days it takes for a company to pay its suppliers. A longer payables period could indicate favorable terms with suppliers or potential cash flow management strategies.
- Similar to DSO, the data for the Number of Days of Payables for United Parcel Service Inc is not available for analysis.

Overall, based on the Days of Inventory on Hand ratio, United Parcel Service Inc experienced an increase in the number of days its inventory remained on hand, suggesting a potential need to assess and enhance its inventory management processes to improve efficiency and reduce holding costs. However, without data on Days of Sales Outstanding and Number of Days of Payables, the complete picture of the company's activity ratios is lacking.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	—	—	2.61	2.63	2.62
Total asset turnover	1.30	1.28	1.41	1.40	1.35

United Parcel Service Inc's long-term activity ratios show a stable trend over the years.

The Fixed Asset Turnover ratio has remained relatively consistent, with values of 2.62 in 2020, 2.63 in 2021, and 2.61 in 2022. This ratio indicates that for every dollar invested in fixed assets, UPS generates around $2.61 to $2.63 in revenue. The fact that this ratio has been stable over the years suggests that UPS is efficiently utilizing its fixed assets to generate revenue.

In contrast, the Total Asset Turnover ratio has shown a slight increase from 1.35 in 2020 to 1.30 in 2024. This ratio measures how effectively UPS is using its total assets to generate revenue. The increase in the Total Asset Turnover ratio indicates that UPS has become more efficient in generating revenue from its total assets over time.

Overall, both ratios suggest that United Parcel Service Inc is effectively utilizing its assets to generate revenue, with a particular focus on efficiently using fixed assets to drive revenue generation.