Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
United Parcel Service Inc., solvency ratios
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).
Solvency ratios for the analyzed period demonstrate a fluctuating, yet generally increasing, reliance on debt financing alongside a declining ability to comfortably cover fixed charges. Several metrics indicate a shift in the company’s financial structure over the five-year period.
- Debt Levels
- Debt to equity, both with and without the inclusion of operating lease liabilities, decreased from 2021 to 2022, suggesting a reduction in financial leverage. However, both metrics then increased through 2025, indicating a renewed increase in debt relative to equity. Debt to capital followed a similar pattern, decreasing in 2022 before rising again. Debt to assets remained relatively stable, with a slight increase observed towards the end of the period. The inclusion of operating lease liabilities consistently results in higher debt ratios, highlighting the impact of these obligations on the company’s overall debt position.
- Leverage
- Financial leverage decreased significantly from 2021 to 2022, then exhibited a gradual upward trend through 2025. This suggests that the company initially reduced its reliance on borrowed funds to finance its assets, but subsequently increased its leverage. The increase in financial leverage aligns with the observed increases in debt to equity and debt to capital ratios.
- Coverage Ratios
- Interest coverage and fixed charge coverage ratios both experienced a substantial decline throughout the analyzed period. Interest coverage decreased from 24.91 in 2021 to 8.04 in 2025, indicating a diminishing ability to cover interest expenses with earnings. A similar trend is observed in fixed charge coverage, which decreased from 12.66 to 4.64 over the same period. This decline suggests a weakening capacity to meet all fixed financial obligations, including both interest and other fixed charges. The decreasing coverage ratios are a significant concern and warrant further investigation.
In summary, the company initially improved its solvency position in 2022, but subsequently increased its debt levels and experienced a notable deterioration in its ability to cover fixed charges. The trend in coverage ratios is particularly noteworthy and suggests increasing financial risk.
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Debt Ratios
Coverage Ratios
Debt to Equity
United Parcel Service Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt and finance leases | 608) | 1,838) | 3,348) | 2,341) | 2,131) | |
| Long-term debt and finance leases, excluding current maturities | 23,519) | 19,446) | 18,916) | 17,321) | 19,784) | |
| Total debt | 24,127) | 21,284) | 22,264) | 19,662) | 21,915) | |
| Equity for controlling interests | 16,227) | 16,718) | 17,306) | 19,786) | 14,253) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.49 | 1.27 | 1.29 | 0.99 | 1.54 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| FedEx Corp. | 0.73 | 0.73 | 0.79 | 0.81 | 0.86 | |
| Uber Technologies Inc. | 0.40 | 0.45 | 0.89 | 1.32 | 0.66 | |
| Union Pacific Corp. | 1.72 | 1.85 | 2.20 | 2.74 | 2.10 | |
| United Airlines Holdings Inc. | 1.64 | 2.26 | 3.40 | 4.68 | 7.03 | |
| Debt to Equity, Sector | ||||||
| Transportation | 1.07 | 1.16 | 1.49 | 1.62 | 1.63 | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.31 | 1.39 | 1.52 | 1.42 | 1.37 | |
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).
1 2025 Calculation
Debt to equity = Total debt ÷ Equity for controlling interests
= 24,127 ÷ 16,227 = 1.49
2 Click competitor name to see calculations.
The debt to equity ratio exhibited fluctuations over the five-year period. Initially, the ratio decreased significantly before stabilizing and then increasing again. This suggests a shifting reliance on debt versus equity financing.
- Debt to Equity Ratio - Overall Trend
- The debt to equity ratio began at 1.54 in 2021. A substantial decrease was observed in 2022, falling to 0.99. The ratio then experienced a moderate increase in 2023 to 1.29, followed by a slight increase to 1.27 in 2024. Finally, the ratio increased to 1.49 in 2025, nearing the initial level from 2021.
The most significant change occurred between 2021 and 2022, indicating a considerable reduction in the proportion of debt relative to equity during that period. The subsequent years demonstrate a trend towards increased leverage, although the 2025 ratio remains below the 2021 level.
- Debt Component
- Total debt decreased from US$21,915 million in 2021 to US$19,662 million in 2022. It then increased to US$22,264 million in 2023, decreased slightly to US$21,284 million in 2024, and rose again to US$24,127 million in 2025.
- Equity Component
- Equity for controlling interests increased from US$14,253 million in 2021 to US$19,786 million in 2022. It subsequently decreased to US$17,306 million in 2023, further decreasing to US$16,718 million in 2024, and finally to US$16,227 million in 2025.
The interplay between the debt and equity components explains the observed ratio fluctuations. The large increase in equity in 2022 drove the ratio down, while subsequent decreases in equity combined with increases in debt contributed to the ratio’s rise in the later years.
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Debt to Equity (including Operating Lease Liability)
United Parcel Service Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt and finance leases | 608) | 1,838) | 3,348) | 2,341) | 2,131) | |
| Long-term debt and finance leases, excluding current maturities | 23,519) | 19,446) | 18,916) | 17,321) | 19,784) | |
| Total debt | 24,127) | 21,284) | 22,264) | 19,662) | 21,915) | |
| Current maturities of operating leases | 763) | 733) | 709) | 621) | 580) | |
| Non-current operating leases | 3,700) | 3,635) | 3,756) | 3,238) | 3,033) | |
| Total debt (including operating lease liability) | 28,590) | 25,652) | 26,729) | 23,521) | 25,528) | |
| Equity for controlling interests | 16,227) | 16,718) | 17,306) | 19,786) | 14,253) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.76 | 1.53 | 1.54 | 1.19 | 1.79 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 1.33 | 1.37 | 1.47 | 1.49 | 1.51 | |
| Uber Technologies Inc. | 0.45 | 0.53 | 1.04 | 1.58 | 0.79 | |
| Union Pacific Corp. | 1.78 | 1.92 | 2.31 | 2.87 | 2.22 | |
| United Airlines Holdings Inc. | 2.03 | 2.65 | 3.94 | 5.41 | 8.17 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Transportation | 1.35 | 1.48 | 1.88 | 2.03 | 2.02 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.46 | 1.55 | 1.71 | 1.59 | 1.54 | |
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).
1 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Equity for controlling interests
= 28,590 ÷ 16,227 = 1.76
2 Click competitor name to see calculations.
The debt-to-equity ratio, inclusive of operating lease liabilities, exhibited fluctuations over the five-year period. Initially, the ratio decreased significantly before stabilizing and then increasing again. Total debt demonstrated an initial decline followed by increases, while equity experienced an increase initially, then subsequent declines.
- Debt-to-Equity Ratio Trend
- The debt-to-equity ratio began at 1.79 in 2021. A substantial decrease was observed in 2022, falling to 1.19. The ratio remained relatively stable in 2023 and 2024, at 1.54 and 1.53 respectively. An increase to 1.76 was recorded in 2025, returning the ratio to a level comparable to that of 2021.
- Total Debt
- Total debt, including operating lease liability, decreased from US$25,528 million in 2021 to US$23,521 million in 2022. An increase to US$26,729 million was noted in 2023, followed by a slight decrease to US$25,652 million in 2024. The final year, 2025, saw a further increase, reaching US$28,590 million.
- Equity for Controlling Interests
- Equity for controlling interests increased from US$14,253 million in 2021 to US$19,786 million in 2022. Subsequent years showed a declining trend, with equity decreasing to US$17,306 million in 2023, US$16,718 million in 2024, and US$16,227 million in 2025.
The initial decrease in the debt-to-equity ratio in 2022 coincided with an increase in equity and a decrease in total debt. The subsequent stabilization and increase in the ratio from 2023 onwards are attributable to the combination of increasing debt and decreasing equity. The 2025 ratio suggests a return to a higher level of financial leverage compared to the 2023-2024 period.
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Debt to Capital
United Parcel Service Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt and finance leases | 608) | 1,838) | 3,348) | 2,341) | 2,131) | |
| Long-term debt and finance leases, excluding current maturities | 23,519) | 19,446) | 18,916) | 17,321) | 19,784) | |
| Total debt | 24,127) | 21,284) | 22,264) | 19,662) | 21,915) | |
| Equity for controlling interests | 16,227) | 16,718) | 17,306) | 19,786) | 14,253) | |
| Total capital | 40,354) | 38,002) | 39,570) | 39,448) | 36,168) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.60 | 0.56 | 0.56 | 0.50 | 0.61 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| FedEx Corp. | 0.42 | 0.42 | 0.44 | 0.45 | 0.46 | |
| Uber Technologies Inc. | 0.28 | 0.31 | 0.47 | 0.57 | 0.40 | |
| Union Pacific Corp. | 0.63 | 0.65 | 0.69 | 0.73 | 0.68 | |
| United Airlines Holdings Inc. | 0.62 | 0.69 | 0.77 | 0.82 | 0.88 | |
| Debt to Capital, Sector | ||||||
| Transportation | 0.52 | 0.54 | 0.60 | 0.62 | 0.62 | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.57 | 0.58 | 0.60 | 0.59 | 0.58 | |
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).
1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 24,127 ÷ 40,354 = 0.60
2 Click competitor name to see calculations.
The Debt to Capital ratio exhibits fluctuations over the five-year period. Initially, the ratio decreased, then stabilized, and finally showed an increasing trend. This suggests a shifting reliance on debt financing relative to the company’s overall capital structure.
- Debt to Capital Ratio - Overall Trend
- The Debt to Capital ratio began at 0.61 in 2021. A notable decrease was observed in 2022, falling to 0.50. The ratio then remained relatively stable at 0.56 for both 2023 and 2024. Finally, the ratio increased to 0.60 in 2025, indicating a growing proportion of debt relative to total capital.
The decline from 2021 to 2022 suggests a reduction in the company’s financial leverage, potentially through debt repayment or an increase in equity. The subsequent stabilization in 2023 and 2024 indicates a period of maintaining the capital structure. The increase in 2025 warrants further investigation to determine the reasons behind the increased debt financing, such as investment in growth initiatives or changes in operational needs.
- Total Debt
- Total debt decreased from US$21,915 million in 2021 to US$19,662 million in 2022. It then increased to US$22,264 million in 2023, decreased slightly to US$21,284 million in 2024, and rose again to US$24,127 million in 2025. This pattern mirrors the fluctuations observed in the Debt to Capital ratio.
- Total Capital
- Total capital increased from US$36,168 million in 2021 to US$39,448 million in 2022, and then to US$39,570 million in 2023. A slight decrease to US$38,002 million was noted in 2024, followed by an increase to US$40,354 million in 2025. The growth in total capital, while not consistently offsetting the debt increases, contributes to the observed ratio movements.
The interplay between changes in total debt and total capital is crucial in understanding the Debt to Capital ratio. While debt levels have fluctuated, the overall capital base has generally increased, though not always at a rate sufficient to prevent the ratio from rising in the most recent period.
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Debt to Capital (including Operating Lease Liability)
United Parcel Service Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt and finance leases | 608) | 1,838) | 3,348) | 2,341) | 2,131) | |
| Long-term debt and finance leases, excluding current maturities | 23,519) | 19,446) | 18,916) | 17,321) | 19,784) | |
| Total debt | 24,127) | 21,284) | 22,264) | 19,662) | 21,915) | |
| Current maturities of operating leases | 763) | 733) | 709) | 621) | 580) | |
| Non-current operating leases | 3,700) | 3,635) | 3,756) | 3,238) | 3,033) | |
| Total debt (including operating lease liability) | 28,590) | 25,652) | 26,729) | 23,521) | 25,528) | |
| Equity for controlling interests | 16,227) | 16,718) | 17,306) | 19,786) | 14,253) | |
| Total capital (including operating lease liability) | 44,817) | 42,370) | 44,035) | 43,307) | 39,781) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.64 | 0.61 | 0.61 | 0.54 | 0.64 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 0.57 | 0.58 | 0.60 | 0.60 | 0.60 | |
| Uber Technologies Inc. | 0.31 | 0.35 | 0.51 | 0.61 | 0.44 | |
| Union Pacific Corp. | 0.64 | 0.66 | 0.70 | 0.74 | 0.69 | |
| United Airlines Holdings Inc. | 0.67 | 0.73 | 0.80 | 0.84 | 0.89 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Transportation | 0.57 | 0.60 | 0.65 | 0.67 | 0.67 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.59 | 0.61 | 0.63 | 0.61 | 0.61 | |
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).
1 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 28,590 ÷ 44,817 = 0.64
2 Click competitor name to see calculations.
The Debt to Capital ratio, inclusive of operating lease liabilities, demonstrates a fluctuating pattern over the five-year period. Initial observation reveals a decrease followed by a period of relative stability and a subsequent increase.
- Overall Trend
- The ratio began at 0.64 in 2021, decreased to 0.54 in 2022, and then exhibited relative stability at 0.61 in both 2023 and 2024. The ratio then increased to 0.64 in 2025, returning to the level observed in 2021.
- Year-over-Year Changes
- A notable decrease occurred between 2021 and 2022, indicating a reduction in the proportion of debt financing relative to total capital. The period from 2022 to 2024 shows minimal change, suggesting a consistent capital structure. The increase from 2024 to 2025 indicates a renewed reliance on debt financing or a contraction in the capital base.
- Total Debt and Capital
- Total debt, including operating lease liability, decreased from US$25,528 million in 2021 to US$23,521 million in 2022, then increased to US$26,729 million in 2023, decreased slightly to US$25,652 million in 2024, and finally increased to US$28,590 million in 2025.
- Total capital, including operating lease liability, increased from US$39,781 million in 2021 to US$43,307 million in 2022, then increased to US$44,035 million in 2023, decreased to US$42,370 million in 2024, and increased to US$44,817 million in 2025.
The observed fluctuations in both total debt and total capital contribute to the changes in the Debt to Capital ratio. The increase in the ratio in 2025 suggests that debt growth outpaced capital growth during that year.
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Debt to Assets
United Parcel Service Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt and finance leases | 608) | 1,838) | 3,348) | 2,341) | 2,131) | |
| Long-term debt and finance leases, excluding current maturities | 23,519) | 19,446) | 18,916) | 17,321) | 19,784) | |
| Total debt | 24,127) | 21,284) | 22,264) | 19,662) | 21,915) | |
| Total assets | 73,090) | 70,070) | 70,857) | 71,124) | 69,405) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.33 | 0.30 | 0.31 | 0.28 | 0.32 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| FedEx Corp. | 0.23 | 0.23 | 0.24 | 0.24 | 0.25 | |
| Uber Technologies Inc. | 0.17 | 0.19 | 0.26 | 0.30 | 0.25 | |
| Union Pacific Corp. | 0.46 | 0.46 | 0.49 | 0.51 | 0.47 | |
| United Airlines Holdings Inc. | 0.33 | 0.39 | 0.45 | 0.48 | 0.52 | |
| Debt to Assets, Sector | ||||||
| Transportation | 0.30 | 0.32 | 0.35 | 0.36 | 0.36 | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.30 | 0.31 | 0.31 | 0.31 | 0.30 | |
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).
1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 24,127 ÷ 73,090 = 0.33
2 Click competitor name to see calculations.
The debt-to-assets ratio exhibits a generally stable pattern over the five-year period, with some fluctuation. Initial observation suggests a moderate level of financial leverage throughout the analyzed timeframe.
- Overall Trend
- The debt-to-assets ratio decreased from 0.32 in 2021 to 0.28 in 2022, indicating a reduction in the proportion of assets financed by debt. It then experienced a slight increase to 0.31 in 2023, followed by a further slight decrease to 0.30 in 2024. The most recent year, 2025, shows an increase to 0.33, representing the highest ratio value within the observed period.
- Year-over-Year Changes
- The largest year-over-year decrease occurred between 2021 and 2022, with a reduction of 0.04. The most significant increase was observed between 2024 and 2025, with an increase of 0.03. Changes between other consecutive years were relatively minor, ranging from 0.01 to 0.02.
- Ratio Levels
- The ratio remained within a narrow band, fluctuating between 0.28 and 0.33. A ratio consistently above 0.30 suggests that more than 30% of the company’s assets are financed by debt. The increase in 2025 warrants further investigation to determine the underlying reasons for the increased reliance on debt financing.
- Debt and Asset Movements
- Total debt decreased between 2021 and 2022, contributing to the initial ratio decline. While total debt increased in 2023 and 2025, the growth in total assets partially offset these increases, preventing more substantial changes in the debt-to-assets ratio. The relatively stable asset base between 2022 and 2024, coupled with fluctuating debt levels, explains the minor ratio variations during those years.
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Debt to Assets (including Operating Lease Liability)
United Parcel Service Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt and finance leases | 608) | 1,838) | 3,348) | 2,341) | 2,131) | |
| Long-term debt and finance leases, excluding current maturities | 23,519) | 19,446) | 18,916) | 17,321) | 19,784) | |
| Total debt | 24,127) | 21,284) | 22,264) | 19,662) | 21,915) | |
| Current maturities of operating leases | 763) | 733) | 709) | 621) | 580) | |
| Non-current operating leases | 3,700) | 3,635) | 3,756) | 3,238) | 3,033) | |
| Total debt (including operating lease liability) | 28,590) | 25,652) | 26,729) | 23,521) | 25,528) | |
| Total assets | 73,090) | 70,070) | 70,857) | 71,124) | 69,405) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.39 | 0.37 | 0.38 | 0.33 | 0.37 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 0.43 | 0.43 | 0.44 | 0.43 | 0.44 | |
| Uber Technologies Inc. | 0.20 | 0.22 | 0.30 | 0.36 | 0.29 | |
| Union Pacific Corp. | 0.47 | 0.48 | 0.51 | 0.53 | 0.50 | |
| United Airlines Holdings Inc. | 0.41 | 0.45 | 0.52 | 0.55 | 0.60 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Transportation | 0.39 | 0.40 | 0.44 | 0.45 | 0.45 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.34 | 0.35 | 0.35 | 0.34 | 0.34 | |
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).
1 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 28,590 ÷ 73,090 = 0.39
2 Click competitor name to see calculations.
The debt to assets ratio, inclusive of operating lease liabilities, exhibits a fluctuating pattern over the five-year period. Initially, the ratio decreased before stabilizing and then increasing slightly. Total debt demonstrated an initial decrease followed by increases in later years, while total assets showed a more moderate pattern of change.
- Debt to Assets Ratio - Overall Trend
- The debt to assets ratio began at 0.37 in 2021, decreased to 0.33 in 2022, and then rose to 0.38 in 2023. It remained relatively stable at 0.37 in 2024 before increasing further to 0.39 in 2025. This indicates a gradual increase in leverage towards the end of the analyzed period.
- Total Debt
- Total debt, including operating lease liability, decreased from US$25,528 million in 2021 to US$23,521 million in 2022. Subsequently, it increased to US$26,729 million in 2023, decreased slightly to US$25,652 million in 2024, and then increased to US$28,590 million in 2025. This suggests a period of debt reduction followed by renewed borrowing.
- Total Assets
- Total assets increased from US$69,405 million in 2021 to US$71,124 million in 2022. A slight decrease was observed in 2023, with assets totaling US$70,857 million. Assets then decreased further to US$70,070 million in 2024 before increasing to US$73,090 million in 2025. The asset base demonstrates moderate growth overall.
The observed increase in the debt to assets ratio in 2023, 2024 and 2025, coupled with the rising total debt, suggests a growing reliance on debt financing relative to the asset base. While the ratio remains below 0.40 throughout the period, the upward trend warrants monitoring to assess potential financial risk.
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Financial Leverage
United Parcel Service Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 73,090) | 70,070) | 70,857) | 71,124) | 69,405) | |
| Equity for controlling interests | 16,227) | 16,718) | 17,306) | 19,786) | 14,253) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 4.50 | 4.19 | 4.09 | 3.59 | 4.87 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| FedEx Corp. | 3.12 | 3.15 | 3.34 | 3.45 | 3.43 | |
| Uber Technologies Inc. | 2.29 | 2.38 | 3.44 | 4.37 | 2.68 | |
| Union Pacific Corp. | 3.77 | 4.01 | 4.54 | 5.38 | 4.49 | |
| United Airlines Holdings Inc. | 5.00 | 5.84 | 7.63 | 9.77 | 13.56 | |
| Financial Leverage, Sector | ||||||
| Transportation | 3.51 | 3.67 | 4.25 | 4.53 | 4.48 | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.34 | 4.49 | 4.94 | 4.65 | 4.52 | |
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).
1 2025 Calculation
Financial leverage = Total assets ÷ Equity for controlling interests
= 73,090 ÷ 16,227 = 4.50
2 Click competitor name to see calculations.
The financial leverage of the company exhibits fluctuations over the five-year period. Total assets remained relatively stable, experiencing a slight decrease between 2022 and 2024 before increasing in 2025. Equity for controlling interests increased significantly from 2021 to 2022, but subsequently declined through 2025. These movements in equity and assets contribute to the observed changes in financial leverage.
- Financial Leverage
- The financial leverage ratio decreased from 4.87 in 2021 to 3.59 in 2022, indicating a reduced reliance on debt financing relative to equity. This improvement was likely driven by the substantial increase in equity during that year. However, the ratio then increased to 4.09 in 2023 and further to 4.19 in 2024, suggesting a growing dependence on debt. The trend continued with a rise to 4.50 in 2025. This indicates that the company is increasingly financing its assets with debt, potentially increasing financial risk.
The decline in equity from 2022 through 2025, coupled with relatively stable assets, is the primary driver of the increasing financial leverage ratio. While the asset base remained consistent, the diminishing equity base amplified the ratio, signifying a higher proportion of debt relative to owner investment. This trend warrants further investigation to understand the underlying reasons for the equity reduction and the implications for the company’s long-term financial health.
The increase in financial leverage in the later years of the period suggests a potential shift in the company’s capital structure. Monitoring this trend is crucial, as higher leverage can increase vulnerability to economic downturns and potentially constrain future financial flexibility.
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Interest Coverage
United Parcel Service Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 5,572) | 5,782) | 6,708) | 11,548) | 12,890) | |
| Add: Income tax expense | 1,592) | 1,660) | 1,865) | 3,277) | 3,705) | |
| Add: Interest expense | 1,017) | 866) | 785) | 704) | 694) | |
| Earnings before interest and tax (EBIT) | 8,181) | 8,308) | 9,358) | 15,529) | 17,289) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 8.04 | 9.59 | 11.92 | 22.06 | 24.91 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| FedEx Corp. | 7.90 | 8.83 | 8.73 | 8.11 | 9.42 | |
| Uber Technologies Inc. | 14.06 | 8.81 | 4.74 | -15.49 | -1.20 | |
| Union Pacific Corp. | 8.00 | 7.93 | 7.14 | 8.14 | 8.33 | |
| United Airlines Holdings Inc. | 4.69 | 3.97 | 2.91 | 1.59 | -0.62 | |
| Interest Coverage, Sector | ||||||
| Transportation | 7.74 | 7.31 | 6.34 | 5.17 | 6.98 | |
| Interest Coverage, Industry | ||||||
| Industrials | 7.07 | 5.79 | 6.64 | 4.98 | 5.14 | |
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).
1 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= 8,181 ÷ 1,017 = 8.04
2 Click competitor name to see calculations.
The period under review demonstrates a consistent decline in interest coverage. While the metric remained at a healthy level initially, a clear downward trend emerges, indicating a weakening ability to meet interest obligations from operating earnings.
- Earnings Before Interest and Tax (EBIT)
- EBIT decreased from US$17,289 million in 2021 to US$8,181 million in 2025. This substantial reduction in operating profitability is a primary driver of the declining interest coverage ratio. The largest decrease occurred between 2022 and 2023, with a further, albeit smaller, decrease observed in subsequent years.
- Interest Expense
- Interest expense exhibited an increasing trend throughout the period, rising from US$694 million in 2021 to US$1,017 million in 2025. This increase, while not as dramatic as the decline in EBIT, contributes to the reduced interest coverage.
- Interest Coverage Ratio
- The interest coverage ratio decreased steadily from 24.91 in 2021 to 8.04 in 2025. This represents a significant deterioration in the company’s ability to cover its interest expense with its earnings before interest and taxes. A ratio below 10 suggests a reduced margin of safety, and continued decline warrants monitoring.
The combined effect of decreasing earnings and increasing interest expense has resulted in a substantial reduction in the interest coverage ratio. This trend suggests increasing financial risk and potentially reduced flexibility in managing debt obligations. Further investigation into the factors driving the decline in EBIT is recommended.
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Fixed Charge Coverage
United Parcel Service Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 5,572) | 5,782) | 6,708) | 11,548) | 12,890) | |
| Add: Income tax expense | 1,592) | 1,660) | 1,865) | 3,277) | 3,705) | |
| Add: Interest expense | 1,017) | 866) | 785) | 704) | 694) | |
| Earnings before interest and tax (EBIT) | 8,181) | 8,308) | 9,358) | 15,529) | 17,289) | |
| Add: Operating lease costs | 950) | 912) | 860) | 736) | 729) | |
| Earnings before fixed charges and tax | 9,131) | 9,220) | 10,218) | 16,265) | 18,018) | |
| Interest expense | 1,017) | 866) | 785) | 704) | 694) | |
| Operating lease costs | 950) | 912) | 860) | 736) | 729) | |
| Fixed charges | 1,967) | 1,778) | 1,645) | 1,440) | 1,423) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 4.64 | 5.19 | 6.21 | 11.30 | 12.66 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| FedEx Corp. | 2.29 | 2.43 | 2.34 | 2.29 | 2.83 | |
| Uber Technologies Inc. | 8.89 | 6.00 | 3.48 | -9.72 | -0.36 | |
| Union Pacific Corp. | 6.68 | 6.47 | 5.82 | 6.64 | 6.81 | |
| United Airlines Holdings Inc. | 3.09 | 2.85 | 2.25 | 1.38 | -0.01 | |
| Fixed Charge Coverage, Sector | ||||||
| Transportation | 4.01 | 3.88 | 3.54 | 2.98 | 3.86 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 4.66 | 3.96 | 4.32 | 3.30 | 3.44 | |
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).
1 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 9,131 ÷ 1,967 = 4.64
2 Click competitor name to see calculations.
The period under review demonstrates a consistent decline in fixed charge coverage. Earnings before fixed charges and tax decreased substantially over the five-year period, while fixed charges steadily increased. This combination resulted in a weakening ability to meet fixed financial obligations.
- Earnings Before Fixed Charges and Tax
- Earnings before fixed charges and tax began at US$18,018 million in 2021 and decreased to US$9,131 million in 2025. The largest single-year decline occurred between 2022 and 2023, falling from US$16,265 million to US$10,218 million. The rate of decline moderated in subsequent years, but remained negative.
- Fixed Charges
- Fixed charges exhibited a consistent upward trend, increasing from US$1,423 million in 2021 to US$1,967 million in 2025. The increases were relatively modest in the earlier years, but accelerated between 2023 and 2025, with increases of US$133 million and US$189 million respectively.
- Fixed Charge Coverage
- The fixed charge coverage ratio decreased significantly from 12.66 in 2021 to 4.64 in 2025. This represents a more than 63% reduction in coverage over the period. The ratio’s decline mirrored the trends in its component parts, with decreasing earnings and increasing fixed charges exerting downward pressure. The ratio fell below 6.0 in 2023 and continued to decrease in the following two years.
The observed trends suggest a growing strain on the entity’s ability to comfortably cover its fixed financial obligations. Continued monitoring of these ratios is warranted, alongside an investigation into the underlying drivers of the declining earnings and increasing fixed charges.
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