United Parcel Service Inc. (NYSE:UPS)

The analyzed financial data reveals notable trends in the company's profitability and financial structure over multiple quarters from March 2021 through September 2025.

Return on Assets (ROA)

The ROA shows an initial upward trend from 8.17% in March 2021 to a peak of 18.57% in December 2021, indicating a significant improvement in asset efficiency during this period. Following this peak, ROA gradually declines overall, reaching lower levels between 7.57% and 8.76% in 2024, with slight fluctuations thereafter. This decline trend may point to diminishing effectiveness in asset utilization or increasing asset base without proportional earnings growth.

Financial Leverage

Financial leverage exhibits a consistent downward trend from 8.86 in March 2021 to 3.59 in December 2022, reflecting a reduction in reliance on debt relative to equity. After this low point, leverage slightly increases and stabilizes in the range of approximately 4.0 to 4.51 in the subsequent quarters through September 2025. This pattern suggests a strategic deleveraging followed by maintaining a moderate leverage position, potentially balancing risk and growth financing needs.

Return on Equity (ROE)

The ROE initially climbs sharply from 72.34% in March 2021 to a peak of 90.44% in December 2021, signaling strong profitability from shareholders’ equity during this period. Post-peak, a persistent declining trend is observed, with ROE falling steadily to around 30.85% by mid-2024. A mild recovery occurs afterwards, with figures stabilizing in the 34% to 37% range up to late 2025. This reduction aligns with the lower ROA and reduced financial leverage, indicating that the company’s ability to generate equity returns has moderated from its earlier highs.

In summary, the company experienced strong profitability and efficient asset use at the end of 2021, supported by high financial leverage amplifying returns on equity. Subsequently, a deliberate reduction in leverage corresponds with a decline in both ROA and ROE, suggesting a strategic shift to lower financial risk, albeit at the expense of reduced profitability metrics. The later quarters indicate a possible stabilization phase where the company maintains balanced leverage and modest returns, potentially reflecting adjustments to market conditions or internal financial policies.

The analysis of the quarterly financial ratios reveals distinct trends in profitability, efficiency, leverage, and shareholder returns over the examined periods.

Net Profit Margin

The net profit margin exhibited an initial upward trend, rising from 5.78% to a peak of 13.25% by the end of 2021. Subsequently, it experienced a gradual decline through 2022 and 2023, reaching a low point of approximately 5.87% by mid-2024. Thereafter, a modest recovery occurred, stabilizing in the range of 6.15% to 6.44% through 2024 and into early 2025. This pattern suggests fluctuating profitability with a significant peak followed by normalization at a moderate margin.

Asset Turnover

The asset turnover ratio remained relatively stable but showed a slight downward trend over time. Beginning at 1.41, the ratio hovered around 1.4 during the initial period but decreased progressively from 1.45 in late 2021 to approximately 1.25 by late 2025. This decline indicates a marginal reduction in the efficiency with which assets are utilized to generate sales.

Financial Leverage

Financial leverage, measured as a ratio, demonstrated a significant reduction from 8.86 at the start of the period to a low around 3.59 by the end of 2022. Following this decline, leverage ratios slightly increased and stabilized between roughly 4.0 and 4.5 through 2024 and early 2025. The initial sharp decline indicates a strategic reduction of reliance on debt or fixed financial obligations, followed by cautious re-leveraging in later periods.

Return on Equity (ROE)

Return on equity presented a pattern of volatility, peaking at 90.44% during the final quarter of 2021. Following this spike, ROE declined noticeably to about 30.85% by mid-2024, with a mild recovery to around 37.39% by late 2025. Despite fluctuations, the overall trend indicates decreasing efficiency in generating shareholder returns, albeit at a still relatively high level after the decline.

In summary, the company’s profitability demonstrated a peak followed by normalization, asset efficiency showed a slight decreasing trend, financial leverage was markedly reduced and then slightly increased, and return on equity experienced volatility with a general downward trend over the examined timeframe. These trends suggest adjustments in operational efficiency and financing strategy, impacting overall profitability and shareholder returns.

The analysis of the quarterly financial ratios reveals several notable trends over the examined periods.

Tax Burden

The tax burden ratio exhibited relative stability, maintaining values around 0.76 to 0.80 across all periods. A slight upward trend is observed toward the end, reaching approximately 0.80 by the last quarter, indicating a marginal increase in the proportion of earnings retained after taxes.

Interest Burden

This ratio remained fairly consistent, fluctuating around 0.88 to 0.96. A subtle decline is visible over time from a high near 0.96 toward the earlier periods down to approximately 0.88 in the latest quarters, suggesting a gradual reduction in earnings retained after interest expenses.

EBIT Margin

The EBIT margin experienced significant variation. Starting at around 8.39% in early 2021, it peaked substantially at 17.77% by the end of 2021, indicating improved operational profitability during that time. Subsequently, a decline ensued, with margins dropping to below 9% by the end of 2024 and into 2025, reflecting diminishing operational efficiency or profitability in the later periods.

Asset Turnover

This ratio showed mild fluctuations, generally ranging from 1.25 to 1.45. There was a minor decrease from early 2021's higher turnover near 1.44 to approximately 1.25 by the latest quarter, implying a gradual decline in the efficiency with which assets are being used to generate revenue.

Financial Leverage

Financial leverage experienced a significant reduction over time. At the start, the ratio was very high at 8.86 but decreased sharply during 2021 and early 2022, stabilizing around 3.5 to 4.5 in later periods. This suggests a deleveraging strategy or repayment of debt, leading to relatively lower financial risk and reliance on borrowed funds.

Return on Equity (ROE)

ROE initially displayed a highly elevated level, peaking above 90% at the end of 2021, likely driven by high profit margins coupled with high leverage. Following this peak, there has been a consistent downward trend, with ROE declining to approximately the mid-30% range by early 2025. Although still relatively strong, the decline reflects reduced profitability or efficiency for equity holders over the given timeframe.

Overall, the data indicates an environment where profit margins and returns on equity reached significant highs in late 2021 but subsequently softened. Meanwhile, leverage was considerably reduced, which likely contributed to lower financial risk but also affected overall returns. Asset utilization metrics showed slight decreases, pointing to potential challenges in maintaining revenue generation efficiency. The interest and tax burdens remained relatively stable with minor deterioration in interest coverage.

Net Profit Margin

The net profit margin exhibited a rising trend from March 2021 through December 2021, peaking at 13.25%. Subsequently, it experienced a decline, reaching a low of 5.87% in June 2024. Following this trough, a moderate recovery ensued, with the margin stabilizing around the 6.15% to 6.44% range by the end of the observed period in September 2025. This pattern suggests an initial improvement in profitability, followed by a sustained contraction, and a slight rebound towards the final quarters.

Asset Turnover

Asset turnover ratios remained relatively stable throughout, fluctuating within a narrow band between 1.25 and 1.45. The highest values appeared in the mid-2021 to late-2022 period, with a peak at 1.45 in September 2022. From early 2023 onward, a gradual decline is observable, reaching the lower end of the range near 1.25 by September 2025. This indicates a slight reduction in the efficiency with which assets were utilized to generate sales over time.

Return on Assets (ROA)

The return on assets closely followed a similar trajectory as the net profit margin. Starting at 8.17% in March 2021, it surged to a peak of 18.57% by December 2021. Thereafter, a downward trend emerged, with ROA decreasing steadily to 7.57% in June 2024. Subsequently, a modest recovery took place, with ROA rising to approximately 8.55% by September 2025. This pattern reflects fluctuations in overall asset profitability, correlating with shifts in net margin and asset turnover.

Summary of Trends

The data reveals an initial phase of strong profitability and asset utilization efficiency through late 2021, followed by a period of decline across all metrics. The net profit margin and ROA exhibited pronounced peaks in late 2021, suggesting exceptional operational performance during that time, which was not sustained in subsequent periods. Asset turnover showed less volatility but gradually decreased into 2025, implying waning asset efficiency. The modest recovery in net profit margin and ROA toward the end of the timeline points to potential stabilization or improvement in profitability despite lower asset turnover.

Tax Burden

The tax burden ratio remained relatively stable over the entire period, fluctuating narrowly between 0.76 and 0.80. This indicates consistent effective tax management without significant volatility in tax expenses relative to pre-tax income.

Interest Burden

The interest burden ratio showed a slight decline from 0.91 in early 2021 to 0.88 by late 2025. This gradual decrease suggests a marginal increase in interest expenses relative to earnings before interest and taxes, possibly reflecting incremental leverage or higher interest costs over time.

EBIT Margin

EBIT margin displayed a noticeable peak at the end of 2021, reaching 17.77%, followed by a general declining trend. After this peak, margins decreased steadily, reaching 8.83% by the third quarter of 2025. This downward trajectory may imply increased operating costs or pricing pressures impacting profitability.

Asset Turnover

The asset turnover ratio showed a mild decline from approximately 1.41-1.45 in early periods to 1.25 by late 2025. This decrease suggests reduced efficiency in generating revenue from assets over time, indicating possible asset base growth outpacing sales or declining sales productivity.

Return on Assets (ROA)

ROA closely mirrored the trends observed in EBIT margin and asset turnover. It reached a high of 18.57% at the end of 2021 before gradually decreasing to 7.71% by the third quarter of 2025. This indicates that the company’s ability to generate profits from its assets weakened significantly over the analyzed periods.

The financial ratios indicate several notable trends over the observed periods.

Tax Burden

The tax burden ratio remains relatively stable throughout the timeline, fluctuating slightly around 0.77 to 0.80. This suggests consistent tax expense management relative to pre-tax income, with a marginal uptick toward the later periods indicating a slight increase in the effective tax rate.

Interest Burden

The interest burden ratio shows a high and stable performance initially, ranging from 0.91 to 0.96. However, from the period ending December 31, 2023, a gradual decline begins, reaching 0.88 by September 30, 2025. This decline suggests a rising interest expense relative to earnings before interest and taxes (EBIT), indicating potentially increased debt costs or leverage over time.

EBIT Margin

EBIT margin exhibits considerable variation. It starts moderately low in early 2021 (around 8.39% to 9.58%), experiences a notable spike in December 2021 reaching 17.77%, then slightly declines and stabilizes in the 14% to 15% range through most of 2022. From 2023 onward, the margin shows a consistent downward trend, dropping to approximately 8.83% by September 2025. This pattern may reflect fluctuating operational efficiency or changes in revenue and operating costs, with a recent weakening in core profitability.

Net Profit Margin

The net profit margin closely follows the pattern observed in the EBIT margin but at lower levels, beginning around 5.78% in early 2021, climbing to a peak of 13.25% at the end of 2021, and then gradually decreasing thereafter. The margin stabilizes around 10.9% in late 2022 and early 2023 and subsequently declines to 6.15% by late 2025. This decline suggests increasing pressures on bottom-line profitability, potentially attributable to rising costs, interest expenses, or tax impacts as reflected in other ratios.

Overall, the data indicates that after a period of strong profitability in late 2021, there is a trend of declining operational and net profitability which continues through 2025, accompanied by increasing relative interest costs. The consistent tax burden suggests tax-related factors are relatively stable and not a primary driver of profit margin changes.