United Parcel Service Inc. (NYSE:UPS)

Debt to Equity Ratios

The debt to equity ratio exhibits a notable declining trend from 3.32 in March 2021 to 0.99 at the end of 2022, indicating a reduction in financial leverage during this period. However, from early 2023 onwards, the ratio shows a gradual increase, reaching a level of 1.57 by September 2025. When including operating lease liabilities, a similar pattern is observed with ratios decreasing from 3.75 in early 2021 to 1.19 by December 2022, then increasing steadily to 1.85 by the third quarter of 2025.

Debt to Capital Ratios

Debt to capital ratios decline steadily from 0.77 in the first quarter of 2021 to 0.50 at the end of 2022, reflecting improved capitalization. Post-2022, the ratios slightly increase to 0.61 by September 2025. Incorporating operating lease liabilities, the ratio declines from 0.79 to 0.54 over the same initial timeframe and then ascends gradually to 0.65 by the third quarter of 2025, suggesting an overall moderate increase in debt levels relative to capital beginning in 2023.

Debt to Assets Ratios

This ratio decreases from 0.37 in early 2021 to 0.28 by December 2022, signaling enhanced asset coverage relative to debt during that period. Subsequently, there is a gradual upward movement with the ratio reaching 0.35 by late 2025, indicative of a moderate increase in leverage against assets. When factoring in operating lease liabilities, the ratio follows a similar trajectory, declining from 0.42 to 0.33 initially, then climbing back up to 0.41 by Q3 2025.

Financial Leverage

Financial leverage, measured as a ratio, undergoes a marked decrease from 8.86 in March 2021 to 3.59 at the end of 2022, which implies a significant reduction in the extent to which the company is using debt financing relative to equity. From 2023 onwards, this metric rises modestly, stabilizing around the mid-4 range by late 2025, suggesting increased reliance on leverage compared to the trough at the end of 2022.

Interest Coverage Ratio

The interest coverage ratio exhibits strong improvement from 10.56 in the first quarter of 2021 up to a peak of 24.91 by the end of 2021, indicating significantly enhanced ability to meet interest expenses from operating income. However, since then, the ratio demonstrates a downward trend, declining steadily to 8.06 by September 2025. Although the coverage remains above 8 times interest expense, the downward trajectory suggests a weakening buffer for interest obligations in recent years.

The financial data reveals notable trends in the company's capital structure over the observed periods from 2021 to 2025.

Total Debt

Total debt exhibited a general decline from US$23,727 million at the end of Q1 2021 to a low of US$19,662 million at the close of Q4 2022. However, following this trough, total debt increased again reaching approximately US$24,782 million by Q3 2025, marking a significant rise relative to the previous lows. This pattern suggests an initial deleveraging trend followed by renewed leverage accumulation in the latter periods.

Equity for Controlling Interests

Equity showed consistent growth from US$7,147 million in Q1 2021, peaking at US$19,786 million by Q4 2022. Subsequent to this peak, equity declined steadily to around US$15,823 million by Q3 2025. This shift indicates a phase of strengthening equity base followed by a period of contraction, which may have influenced the shifts seen in the company's financial leverage.

Debt to Equity Ratio

The debt-to-equity ratio decreased sharply from a high of 3.32 in Q1 2021 to a low of 0.99 in Q4 2022, reflecting significant deleveraging and an increase in equity relative to debt. From Q1 2023 forward, the ratio began to rise again, reaching 1.57 by Q3 2025. This increase corresponds with the observed rise in total debt and decrease in equity in the latter periods, implying a reversal of the earlier deleveraging trend and a movement toward higher financial leverage.

Overall, the data suggests a strategic transition in the company's capital structure, initially focusing on reducing leverage and strengthening equity before shifting back toward increased debt levels and a higher leverage position in the most recent periods. These fluctuations could reflect changes in the company's financing strategy, investment requirements, or external market conditions influencing its capital management approach.

The financial data reveals notable trends in the company's capital structure over the recent periods. Total debt, inclusive of operating lease liabilities, exhibited a general decline from early 2021 through late 2022, decreasing from approximately $26.8 billion to $23.5 billion. This downward movement indicates a reduction in leverage during this timeframe. However, starting in early 2023, total debt reversed course, increasing steadily and reaching approximately $29.2 billion by late 2025, suggesting a renewed reliance on debt financing in the more recent periods.

Equity attributable to controlling interests has shown a consistent upward trajectory from the beginning of 2021 through mid-2022, rising from about $7.1 billion to nearly $19.8 billion. This growth in equity reflects an accumulation of retained earnings or capital injections enhancing the shareholder base. However, post mid-2022, equity levels fluctuated, experiencing a decline until late 2024, before stabilizing around the $15.6 billion to $15.8 billion range towards the end of the observed period. Such movements may reflect changes in profitability, dividend policies, or shareholder transactions.

The debt-to-equity ratio, inclusive of operating lease liabilities, mirrored these shifts in debt and equity. It decreased significantly from a high of 3.75 in early 2021 to a low of 1.19 by late 2022, indicating a strengthening equity position relative to debt and a lower financial risk profile during that period. However, beginning in 2023, the ratio increased again, peaking near 1.85 by late 2025. This upward trend points to a rising leverage level, suggesting a higher reliance on debt financing relative to equity in the most recent quarters.

In summary, the company's financial leverage diminished substantially through 2022, driven by reducing debt and growing equity. The following years showed a reversal with increasing debt and fluctuating equity levels, culminating in a higher leverage ratio. These dynamics underscore shifts in the company's capital management strategy and risk exposure over the examined timeframe.

Total Debt (including operating lease liability)

Decreased from $26.8 billion (Q1 2021) to $23.5 billion (Q4 2022); increased thereafter to $29.2 billion (Q3 2025).

Equity for controlling interests

Increased from $7.1 billion (Q1 2021) to nearly $19.8 billion (Q4 2022); subsequently declined and stabilized around $15.6 billion to $15.8 billion by late 2025.

Debt to Equity Ratio (including operating lease liability)

Reduced markedly from 3.75 (Q1 2021) to 1.19 (Q4 2022), followed by an increase to approximately 1.85 (Q3 2025), indicating shifting leverage and risk levels.

The analysis of the debt and capital structure over the observed periods reveals several notable trends in the company's financial leverage and capital management.

Total Debt (in US$ millions)

Total debt exhibited a general declining trend from March 31, 2021 (23,727 million) to December 31, 2022 (19,662 million), indicating a reduction in liabilities during this period. However, beginning in the first quarter of 2023, a reversal occurred where total debt increased again, with fluctuations observed over the subsequent quarters. By September 30, 2025, total debt reached 24,782 million, which is slightly above the initial value at the start of the analysis. This pattern suggests a period of deleveraging followed by renewed borrowing or debt accumulation.

Total Capital (in US$ millions)

Total capital rose steadily from the initial value of 30,874 million at the beginning of the period to a peak of 42,226 million by March 31, 2023. This upward trend indicates an increase in the company’s funding base either through equity, debt, or retained earnings over time. After the peak, total capital experienced some decline and volatility, ending at 40,605 million by September 30, 2025. Overall, there is growth in the company’s capital base, though with some recent fluctuations.

Debt to Capital Ratio

The debt to capital ratio decreased significantly from 0.77 as of March 31, 2021, to a low of 0.50 by December 31, 2022. This decline indicates a strengthening of the capital structure with reduced relative leverage, improving the company’s financial stability. Starting in 2023, the ratio began to increase gradually, reaching 0.61 by September 30, 2025. The increase reflects a higher proportion of debt within the capital structure in recent periods, signaling increased reliance on debt financing.

In summary, the company initially reduced its debt levels and improved its leverage ratios significantly over the first two years. This move contributed to a lower risk profile and potentially enhanced creditworthiness. However, beginning in early 2023, both debt and the debt to capital ratio increased, reflecting a strategic shift towards higher leverage or increased borrowing needs. Total capital expanded sharply through early 2023, before experiencing some volatility and slight declines thereafter. These patterns suggest changes in financial strategy or operational funding requirements, necessitating monitoring of debt management and capital efficiency in upcoming periods.

The analysis of the quarterly financial metrics focusing on the company's debt and capital structure reveals notable trends over the observed periods.

Total debt (including operating lease liability)

Total debt showed a general declining trend from March 31, 2021, when it was approximately $26.8 billion, reaching a lower level around $23.5 billion by December 31, 2022. This downward movement suggests efforts towards reducing leverage or paying down liabilities during this interval. However, starting in March 31, 2023, the total debt began to increase again, rising steadily to approximately $29.2 billion by September 30, 2025. This resurgence indicates an accumulation of debt or increased financing activities over the latter periods.

Total capital (including operating lease liability)

The total capital base exhibited an overall upward trajectory starting from about $34.0 billion in March 31, 2021, peaking near $46.4 billion by March 31, 2023. Thereafter, capital fluctuated moderately, with a decrease toward $41.3 billion as of March 31, 2025, followed by a mild recovery to approximately $45.0 billion by September 30, 2025. These movements indicate a generally expanding capital structure with some volatility in the recent periods possibly reflecting shifts in equity financing, retained earnings, or capital market conditions.

Debt to capital ratio (including operating lease liability)

The debt-to-capital ratio declined significantly from 0.79 in March 31, 2021, to its lowest point of 0.54 by December 31, 2022. This reduction points to a deleveraging phase, where the company lowered its relative reliance on debt within its capital structure. However, from early 2023 onwards, the ratio showed an increasing trend, rising back to approximately 0.65 by the third quarter of 2025. This shift implies a renewed weighting towards debt financing relative to total capital, which might reflect changes in strategic financing decisions, market conditions, or operational needs.

In summary, the data demonstrate a cyclical pattern in the company's leverage profile, with an initial phase of debt reduction and strengthening capital base through 2022, followed by increased borrowing and a corresponding rise in leverage ratios starting in 2023. The fluctuations in total capital values suggest a dynamic capital management approach responding to evolving business and market conditions over the period analyzed.

Total Debt

The total debt figures demonstrate a generally fluctuating trend over the observed periods. Beginning at approximately $23.7 billion, total debt shows a declining pattern through 2021 and most of 2022, reaching a low of around $19.7 billion in late 2022. However, starting in early 2023, the debt level increases again, peaking near $24.8 billion by the later part of 2025. This suggests a cycle of debt reduction followed by a subsequent accumulation of liabilities in the later periods.

Total Assets

Total assets steadily increased from approximately $63.3 billion in the first quarter of 2021 to roughly $71.2 billion by the end of 2025. The asset base exhibits consistent growth despite some minor fluctuations, indicating ongoing expansion or reinvestment activities. There is no sharp decline or volatility in total assets, which suggests stability in asset management and potential growth strategies.

Debt to Assets Ratio

The debt to assets ratio follows a downward trend until about late 2022, falling from 0.37 in early 2021 to a low of around 0.28 by the end of 2022. This indicates an improvement in the company's leverage position during this period, with liabilities decreasing relative to the asset base. From 2023 onward, the ratio reverses, trending upward to approximately 0.35 by late 2025. This reflects an increasing proportion of debt relative to assets coinciding with the debt accumulation observed in the total debt data.

Overall Analysis

The data reflects a phase of debt reduction and asset strength from early 2021 through late 2022, improving leverage and likely reducing financial risk. However, in the subsequent years, the company appears to increase its borrowing while maintaining a stable asset base, leading to a higher leverage ratio. This changing leverage profile could signal strategic shifts such as increased investment funded by debt or changes in capital structure preferences. Monitoring further movements in debt levels will be critical to assess financial stability going forward.

The analysis of the quarterly financial data reveals several notable trends in the company's leverage and asset structure over the observed period.

Total Debt (Including Operating Lease Liability)

The total debt exhibits a general declining trend from the first quarter of 2021 through 2022, decreasing from $26,799 million to $23,521 million by the end of 2022. However, starting in 2023, the debt level shows renewed volatility and upward movement, rising to a peak of $29,211 million in the third quarter of 2025. This increase after 2022 indicates a growing reliance on debt financing or increased liabilities in the later periods.

Total Assets

Total assets increase moderately from $63,312 million at the beginning of 2021 to a high of approximately $71,924 million by late 2025. The asset base expands steadily with only minor fluctuations, evidencing ongoing asset accumulation or appreciation. This represents a roughly 13% increase over the five-year span, suggesting asset growth supporting operational scale or investment activity.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio declines consistently from 0.42 in early 2021 down to a low of 0.33 by the end of 2022. This downward slope aligns with reductions in total debt and growing asset levels, improving the company's leverage position. From 2023 onward, the ratio slightly reverses, rising back toward 0.41 by the third quarter of 2025, reflecting the increased debt load relative to assets observed in this period. This inflection indicates a return to higher leverage, potentially signaling greater financial risk or strategic borrowing.

In summary, the financial data depicts a company that initially reduced its debt burden and enhanced its leverage ratios through asset growth until the end of 2022. Subsequently, a trend of increased debt and leveraged financing emerges from 2023 forward, while asset growth remains positive but somewhat irregular. These patterns suggest adaption in capital structure strategy, with evolving risk exposure due to leverage changes in the later quarters.

The financial data reveals significant trends in total assets, equity for controlling interests, and financial leverage over the periods analyzed. These trends provide insights into the company’s financial position and capital structure evolution.

Total Assets

Total assets showed a steady upward trajectory from March 2021 to December 2022, increasing from approximately $63.3 billion to $71.1 billion. However, from March 2023 onwards, total assets exhibited fluctuations with a slight decline alternating with modest recoveries, ending near $71.4 billion by September 2025. This pattern suggests periods of asset reduction or reallocation balanced by intermittent growth phases, potentially reflecting strategic operational adjustments or market conditions affecting asset valuation or acquisition.

Equity for Controlling Interests

Equity increased markedly from $7.1 billion in March 2021 to a peak of approximately $19.8 billion by December 2022, indicating a considerable strengthening of shareholders' equity during this period. After this peak, equity values declined gradually, dropping to about $15.8 billion by September 2025. This decrease may point to reduced retained earnings, dividend distributions, share buybacks, or other equity-compromising factors. The equity trend suggests a phase of capital accumulation followed by relative contraction or stabilization at a lower level.

Financial Leverage

The financial leverage ratio demonstrated a sharp improvement in the early periods, dropping from a high of 8.86 in March 2021 to around 3.59 by December 2022. This indicates a reduction in the reliance on debt relative to equity, reflecting improved equity funding or deleveraging efforts. Post-December 2022, leverage ratios experienced a gradual increase, moving back up to approximately 4.51 by September 2025. While still significantly lower than initial levels, the upward trend in leverage during later periods suggests a cautious increase in debt or relative decline in equity, which could affect financial risk and capital cost considerations.

Overall, the company strengthened its equity base and reduced leverage substantially in the first two years, enhancing financial stability and possibly reducing risk exposure. Following this period, asset valuation stabilized with moderate fluctuations, while slight equity erosion and incremental leverage increases may indicate strategic recalibrations or external economic pressures impacting the capital structure.

EBIT Trend

The earnings before interest and tax (EBIT) exhibit notable fluctuations across the quarters. In 2021, EBIT started at a high level in the first quarter and decreased significantly through the mid-year quarters before partially recovering by the end of the year. The pattern continued into 2022, showing variability without a clear upward or downward trend, with peaks noted in December 2022. In 2023 and 2024, EBIT generally remained lower compared to earlier years, and while some quarters showed modest increases, the overall level suggests a decline relative to the initial periods. The latest quarters indicate a modest stabilization but at reduced levels compared to 2021.

Interest Expense Trend

Interest expense showed a gradual but steady increase over the entire period. Starting from the mid-170 million range in early 2021, it rose consistently each quarter, reaching nearly 300 million by late 2025. This increase points to either higher debt levels or rising borrowing costs over time.

Interest Coverage Ratio Trend

The interest coverage ratio, which measures the firm's ability to meet interest obligations from operating earnings, declined significantly over the analyzed period. Initially, this ratio was strong—above 10 in early 2021 and peaking around 25 at the end of 2021—indicating a comfortable cushion to cover interest expenses. However, from 2022 onwards, there was a steady and sustained decline. By late 2025, the interest coverage ratio fell to approximately 8, signaling a reduced but still adequate capacity to service interest. The decreasing trend is consistent with the downward movement in EBIT and the increasing interest costs.

Overall Analysis

Collectively, the data reveal a diminishing operational profitability as reflected in EBIT declines, coupled with rising financing costs evident by the steady growth in interest expense. This dynamic has resulted in a compression of the interest coverage ratio, though it remains above the critical levels that may raise immediate solvency concerns. The patterns suggest increased financial pressure and highlight the importance of monitoring earnings quality and debt management strategies going forward.