United Parcel Service Inc (UPS)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 17.96% | 18.94% | 13.05% | 13.17% | 9.23% |
| Operating profit margin | 9.30% | 10.05% | 13.05% | 17.75% | 3.12% |
| Pretax margin | 8.17% | 9.43% | 14.78% | 17.06% | 2.33% |
| Net profit margin | 6.35% | 7.37% | 11.51% | 13.25% | 1.59% |
Based on the provided data, United Parcel Service Inc's profitability has shown fluctuations over the years. The gross profit margin, which indicates the percentage of revenue left after deducting the cost of goods sold, increased from 9.23% in 2020 to 17.96% in 2024, showing an improving trend overall.
The operating profit margin, a measure of a company's operating efficiency and profitability, experienced significant variability over the period. It jumped from 3.12% in 2020 to 17.75% in 2021 but then declined to 9.30% in 2024.
The pretax margin, showing the company's ability to generate profit before taxes relative to its total revenue, increased from 2.33% in 2020 to 17.06% in 2021, before decreasing to 8.17% in 2024.
The net profit margin, which reflects the company's overall profitability after all expenses have been deducted, showed a similar pattern to the pretax margin. It rose from 1.59% in 2020 to 13.25% in 2021 but then declined to 6.35% in 2024.
In summary, while the gross profit margin improved consistently over the years, the operating, pretax, and net profit margins displayed more fluctuations. These fluctuations suggest that United Parcel Service Inc has experienced varying levels of operational efficiency and profitability during the period under review.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 12.09% | 12.90% | 18.41% | 24.88% | 4.22% |
| Return on assets (ROA) | 8.25% | 9.47% | 16.24% | 18.57% | 2.15% |
| Return on total capital | 49.69% | 54.02% | 69.83% | 90.28% | 1,034.82% |
| Return on equity (ROE) | 34.59% | 38.76% | 58.36% | 90.44% | 181.24% |
United Parcel Service Inc's profitability ratios show a positive trend over the years. The Operating Return on Assets (Operating ROA) increased from 4.22% in December 2020 to 24.88% in December 2021 before stabilizing around 18-19% in the following years. This indicates the company's ability to generate operating profits from its assets.
Similarly, the Return on Assets (ROA) improved significantly from 2.15% in December 2020 to 18.57% in December 2021, showing strong performance in utilizing its assets to generate profits. However, there was a slight decline in ROA in the subsequent years to around 8-10%, indicating a reduction in overall profitability relative to its total assets.
The Return on Total Capital ratio also exhibited a steep decline from an exceptional 1,034.82% in December 2020 to 49.69% in December 2024. This ratio measures the efficiency of the company in generating profits from its total capital employed.
Lastly, the Return on Equity (ROE) decreased from 181.24% in December 2020 to 34.59% in December 2024. Despite the decline, the ROE remained at a relatively healthy level, indicating the company's ability to generate profits for its equity shareholders.
Overall, United Parcel Service Inc has shown strong profitability performance, particularly in the initial years, although there was a gradual decline in profitability ratios in the later years, suggesting potential challenges in maintaining high levels of profitability.