Stock Analysis on Net
Stock Analysis on Net

United Parcel Service Inc. (NYSE:UPS)

Common-Size Income Statement 

United Parcel Service Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Revenue 100.00 100.00 100.00 100.00 100.00
Compensation and benefits -54.82 -52.81 -51.77 -47.62 -48.01
Repairs and maintenance -3.50 -3.23 -3.11 -2.51 -2.51
Depreciation and amortization -4.23 -3.96 -3.70 -3.18 -3.04
Purchased transportation -11.94 -14.92 -15.01 -17.59 -19.59
Fuel -4.87 -4.79 -5.25 -6.00 -3.95
Other occupancy -2.56 -2.32 -2.22 -1.81 -1.75
Other expenses -9.21 -8.66 -8.89 -8.24 -7.99
Operating expenses -91.13% -90.70% -89.95% -86.95% -86.83%
Operating profit 8.87% 9.30% 10.05% 13.05% 13.17%
Investment income (expense) and other 0.35 -0.18 0.24 2.43 4.60
Interest expense -1.15 -0.95 -0.86 -0.70 -0.71
Other income and (expense) -0.79% -1.13% -0.62% 1.73% 3.89%
Income before income taxes 8.08% 8.17% 9.43% 14.78% 17.06%
Income tax expense -1.80 -1.82 -2.05 -3.27 -3.81
Net income 6.28% 6.35% 7.37% 11.51% 13.25%

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The common-size income statement reveals several noteworthy trends over the five-year period. A consistent increase in operating expenses as a percentage of revenue is observed, while operating profit correspondingly declines. Net income also demonstrates a consistent downward trend as a percentage of revenue, though at a slower rate than operating profit.

Cost of Revenue & Operating Expenses
Compensation and benefits consistently increased from -48.01% to -54.82% of revenue, representing the largest single expense. Purchased transportation decreased significantly, moving from -19.59% to -11.94% of revenue, potentially indicating improved logistical efficiencies or a shift in transportation strategies. Fuel costs experienced volatility, peaking at -6.00% in 2022 before decreasing to -4.87% in 2025. Repairs and maintenance, depreciation and amortization, other occupancy, and other expenses all show incremental increases as a percentage of revenue throughout the period.
Profitability
Operating profit decreased substantially, from 13.17% to 8.87% of revenue. This decline is more pronounced than the decrease in net income, suggesting increasing non-operating expenses are partially offsetting the impact of lower operating profit. Net income decreased from 13.25% to 6.28% of revenue, indicating a diminishing portion of each revenue dollar translates into profit for the company.
Non-Operating Items
Investment income (expense) and other fluctuated considerably, starting at 4.60%, decreasing to 0.24%, then becoming a negative value at -0.18% before a slight recovery to 0.35%. Interest expense increased steadily from -0.71% to -1.15% of revenue, reflecting potentially higher debt levels or increased borrowing costs. Other income and (expense) shifted from a positive 3.89% to a negative -0.79%, contributing to the overall decline in profitability.
Tax Rate
The income tax expense as a percentage of revenue decreased from -3.81% to -1.80%. While this provides some offset to the declining profitability, the reduction in tax expense is not sufficient to counteract the overall downward trend in net income.

In summary, the financial performance indicates increasing cost pressures and decreasing profitability over the observed period. While certain expenses, like purchased transportation, have been managed downwards, the overall trend suggests a need for strategic review of cost structures and revenue generation strategies.

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