United Parcel Service Inc (UPS)
Pretax margin
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) | US$ in thousands | 7,442,000 | 8,573,000 | 14,825,000 | 16,595,000 | 1,974,000 |
| Revenue | US$ in thousands | 91,070,000 | 90,958,000 | 100,338,000 | 97,287,000 | 84,628,000 |
| Pretax margin | 8.17% | 9.43% | 14.78% | 17.06% | 2.33% |
December 31, 2024 calculation
Pretax margin = EBT ÷ Revenue
= $7,442,000K ÷ $91,070,000K
= 8.17%
To analyze the pretax margin of United Parcel Service Inc based on the provided data:
1. The pretax margin indicates the company's profitability before considering taxes and is calculated as pretax income divided by total revenue, expressed as a percentage.
2. As of December 31, 2020, the pretax margin for United Parcel Service Inc stood at 2.33%, reflecting that for every dollar of revenue generated, the company retained 2.33 cents as pretax profit.
3. Subsequently, in December 31, 2021, the pretax margin significantly improved to 17.06%. This substantial increase suggests a notable enhancement in operational efficiency and cost management, resulting in higher profitability.
4. By December 31, 2022, the pretax margin slightly decreased to 14.78%, indicating that while still profitable, the company's efficiency may have declined compared to the previous year.
5. The trend continued as of December 31, 2023, with a further reduction in pretax margin to 9.43%. This decline implies potential challenges or increased costs that impacted the company's profitability.
6. Lastly, as of December 31, 2024, the pretax margin decreased to 8.17%, indicating a continuation of the trend of declining profitability.
In summary, United Parcel Service Inc experienced fluctuations in its pretax margin over the years, with a significant improvement in 2021 followed by subsequent declines. Monitoring and addressing factors influencing profitability will be crucial for the company to sustain and improve its financial performance in the future.