United Parcel Service Inc (UPS)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 9,358,000 | 11,737,000 | 13,716,000 | 14,673,000 | 15,529,000 | 15,015,000 | 14,739,000 | 14,474,000 | 17,289,000 | 9,041,000 | 8,572,000 | 7,509,000 | 2,545,000 | 6,626,000 | 6,290,000 | 6,113,000 | 6,305,000 | 7,028,000 | 6,707,000 | 6,419,000 |
| Long-term debt | US$ in thousands | — | — | 19,351,000 | 19,856,000 | 17,321,000 | 17,769,000 | 17,997,000 | 19,740,000 | 19,784,000 | 20,838,000 | 21,027,000 | 21,916,000 | 22,031,000 | 23,336,000 | 23,199,000 | 24,196,000 | 21,818,000 | 21,740,000 | 20,427,000 | 20,377,000 |
| Total stockholders’ equity | US$ in thousands | 17,306,000 | 19,168,000 | 20,019,000 | 20,038,000 | 19,786,000 | 16,968,000 | 16,289,000 | 15,416,000 | 14,253,000 | 12,041,000 | 10,805,000 | 7,147,000 | 657,000 | 5,592,000 | 4,363,000 | 3,299,000 | 3,267,000 | 5,558,000 | 4,405,000 | 3,467,000 |
| Return on total capital | 54.07% | 61.23% | 34.84% | 36.78% | 41.85% | 43.22% | 42.99% | 41.17% | 50.79% | 27.50% | 26.93% | 25.84% | 11.22% | 22.91% | 22.82% | 22.23% | 25.13% | 25.75% | 27.01% | 26.92% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $9,358,000K ÷ ($—K + $17,306,000K)
= 54.07%
To analyze United Parcel Service, Inc.'s return on total capital, we observe a trend of decreasing returns over the past eight quarters. The return on total capital has decreased from 33.19% in Q4 2022 to 23.10% in Q4 2023. Despite the downward trend, the returns have remained relatively high throughout this period, indicating that United Parcel Service, Inc. has effectively utilized its capital to generate profits. Further analysis is needed to assess the reasons behind the decreasing trend and evaluate the company's efficiency in capital allocation and operational performance.