United Parcel Service Inc (UPS)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.28 | 0.28 | 0.24 | 0.26 | 0.26 | 0.28 | 0.29 | 0.32 | 0.32 | 0.35 | 0.35 | 0.37 | 0.37 | 0.40 | 0.38 | 0.41 | 0.39 | 0.39 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.49 | 0.50 | 0.47 | 0.51 | 0.52 | 0.56 | 0.58 | 0.63 | 0.66 | 0.75 | 0.97 | 0.81 | 0.84 | 0.88 | 0.87 | 0.80 | 0.82 | 0.85 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.97 | 0.99 | 0.88 | 1.05 | 1.10 | 1.28 | 1.39 | 1.73 | 1.95 | 3.07 | 33.53 | 4.17 | 5.32 | 7.33 | 6.68 | 3.91 | 4.64 | 5.88 |
| Financial leverage ratio | 4.09 | 3.67 | 3.51 | 3.60 | 3.59 | 4.10 | 4.30 | 4.55 | 4.87 | 5.46 | 6.00 | 8.86 | 94.99 | 11.16 | 14.22 | 18.46 | 17.71 | 9.59 | 11.98 | 15.02 |
Solvency ratios are important indicators of a company's ability to meet its long-term financial obligations. Let's analyze United Parcel Service, Inc.'s solvency ratios based on the provided data.
1. Debt-to-assets ratio:
The debt-to-assets ratio measures the proportion of a company's assets financed by debt. United Parcel Service's debt-to-assets ratio has been relatively consistent over the past eight quarters, ranging from 0.28 to 0.31. This indicates that around 28% to 31% of the company's assets are funded by debt, with the ratio remaining within a narrow range.
2. Debt-to-capital ratio:
The debt-to-capital ratio shows the percentage of a company's capital structure that is comprised of debt. United Parcel Service's debt-to-capital ratio has also shown consistency, fluctuating between 0.50 and 0.56 over the same period. This indicates that debt constitutes around 50% to 56% of the company's capital, remaining relatively stable.
3. Debt-to-equity ratio:
The debt-to-equity ratio reflects the relationship between a company's debt and equity financing. United Parcel Service's debt-to-equity ratio has shown some variability, ranging from 0.99 to 1.42. This suggests that the company's debt levels relative to equity have fluctuated, with the ratio peaking in Q1 2022 at 1.42.
4. Financial leverage ratio:
The financial leverage ratio measures the extent to which a company utilizes debt in its capital structure. United Parcel Service's financial leverage ratio has shown some fluctuations, varying from 3.51 to 4.55. This indicates that the company's financial leverage, or the proportion of debt in relation to equity, has changed over the quarters analyzed.
Overall, United Parcel Service's solvency ratios suggest that the company has maintained a stable financial position regarding its debt levels relative to assets, capital, and equity. However, the fluctuations in the debt-to-equity ratio and financial leverage ratio indicate some changes in the company's leverage and capital structure over the analyzed quarters.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 11.92 | 15.44 | 18.59 | 20.44 | 22.06 | 21.60 | 21.21 | 20.95 | 24.91 | 12.99 | 12.33 | 10.56 | 3.63 | 9.58 | 9.32 | 9.39 | 9.66 | 11.07 | 10.63 | 10.34 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates that the company is more capable of covering its interest expenses.
In the case of United Parcel Service, Inc., the interest coverage ratio has been consistently strong over the past eight quarters, ranging from 11.64 to 19.84. This indicates that UPS has been generating sufficient operating income to comfortably cover its interest expenses.
The trend shows an improvement over time, with the ratio increasing from 11.64 in Q4 2022 to 19.24 in Q1 2023. This suggests that UPS's financial performance has been on an upward trajectory, with the company becoming more efficient in managing its debt obligations.
Overall, the strong and improving interest coverage ratios reflect UPS's financial stability and ability to meet its debt obligations, which is a positive sign for investors and creditors.