Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Statement of Comprehensive Income
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- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
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Long-term Activity Ratios (Summary)
United Parcel Service Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
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).
An examination of long-term activity ratios reveals several noteworthy trends between 2021 and 2025. Generally, the ratios indicate a decreasing efficiency in asset utilization over the period, though the rate of decline varies by metric. Equity turnover demonstrates relative stability compared to the asset-based ratios.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibits a consistent downward trend, decreasing from 2.91 in 2021 to 2.35 in 2025. This suggests a diminishing ability to generate revenue from fixed assets. The decline, while steady, is not precipitous, but warrants further investigation into potential causes such as increased asset investment without corresponding revenue growth, or asset underutilization.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- A similar decreasing pattern is observed in the net fixed asset turnover ratio that incorporates operating leases and right-of-use assets. Starting at 2.63 in 2021, it falls to 2.11 by 2025. This reinforces the trend of declining revenue generation relative to total fixed assets, even when considering lease obligations. The values are consistently lower than the standard net fixed asset turnover, indicating the impact of lease obligations on asset efficiency.
- Total Asset Turnover
- The total asset turnover ratio initially increases slightly from 1.40 in 2021 to 1.41 in 2022, before declining to 1.21 in 2025. This indicates a decreasing efficiency in utilizing all assets – both fixed and current – to generate revenue. The decrease from 2022 onwards aligns with the trends observed in the net fixed asset turnover ratios, suggesting that changes in asset utilization are a key driver of this performance.
- Equity Turnover
- In contrast to the asset-based ratios, the equity turnover ratio demonstrates more stability. It decreases significantly from 6.83 in 2021 to 5.07 in 2022, then stabilizes, fluctuating between 5.26 and 5.46 from 2023 to 2025. This suggests that while asset utilization is declining, the company maintains a relatively consistent level of revenue generated per dollar of equity. The initial drop in 2022 could be attributed to an increase in equity or a decrease in revenue, requiring further analysis.
Overall, the observed trends suggest a gradual decline in asset efficiency, particularly concerning fixed assets. The relative stability of the equity turnover ratio indicates that changes in equity or revenue are moderating the impact of declining asset utilization on overall financial performance.
Net Fixed Asset Turnover
United Parcel Service Inc., net fixed asset turnover 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) | ||||||
| Revenue | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Transportation | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | ||||||
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
Net fixed asset turnover = Revenue ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio demonstrates a consistent downward trend over the five-year period. While revenue experienced initial growth, it subsequently declined, and the value of property, plant, and equipment, net, consistently increased, contributing to the observed ratio decrease.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 2.91 in 2021 to 2.35 in 2025. This indicates a diminishing ability to generate revenue from its fixed assets over time.
- The ratio experienced a slight decrease from 2.91 in 2021 to 2.89 in 2022, coinciding with a modest increase in revenue. However, the subsequent years show a more pronounced decline.
- From 2022 to 2023, the ratio fell to 2.46, reflecting a more substantial decrease in revenue alongside a continued rise in net property, plant, and equipment. This pattern continued in 2024, with the ratio reaching 2.45.
- The most significant decrease occurred between 2024 and 2025, with the ratio dropping to 2.35. This coincided with a further reduction in revenue and a continued increase in the net value of fixed assets.
The consistent increase in property, plant, and equipment, net, suggests ongoing investment in fixed assets. However, the declining revenue, particularly in the later years, indicates that these investments are not translating into proportional revenue gains. This could be due to a variety of factors, including decreased operational efficiency, market saturation, or increased competition.
The observed trend warrants further investigation to determine the underlying causes of the declining ratio and to assess the effectiveness of capital investment strategies.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
United Parcel Service Inc., net fixed asset turnover (including operating lease, right-of-use asset) 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) | ||||||
| Revenue | ||||||
| Property, plant and equipment, net | ||||||
| Operating lease right-of-use assets | ||||||
| Property, plant and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Transportation | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | ||||||
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
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio, calculated using property, plant, and equipment net of accumulated depreciation and including operating lease right-of-use assets, demonstrates a declining trend over the five-year period. Revenue experienced initial growth followed by contraction, while the value of net fixed assets consistently increased.
- Revenue Trend
- Revenue increased from US$97,287 million in 2021 to US$100,338 million in 2022, representing a growth of approximately 3.1%. However, revenue then decreased significantly to US$90,958 million in 2023 and remained relatively stable at US$91,070 million in 2024 before further declining to US$88,661 million in 2025.
- Net Fixed Asset Trend
- Property, plant, and equipment, net, including operating lease right-of-use assets, exhibited a consistent upward trend throughout the period. The value increased from US$37,037 million in 2021 to US$38,474 million in 2022, then to US$41,253 million in 2023, US$41,328 million in 2024, and finally to US$41,994 million in 2025. This indicates continued investment in fixed assets despite revenue fluctuations.
- Net Fixed Asset Turnover Ratio Trend
- The net fixed asset turnover ratio decreased from 2.63 in 2021 to 2.61 in 2022, a slight decline. A more substantial decrease was observed in 2023, with the ratio falling to 2.20, and it remained at 2.20 in 2024. The ratio continued its downward trajectory, reaching 2.11 in 2025. This suggests a diminishing efficiency in generating revenue from the company’s fixed asset base.
- Combined Implications
- The combination of increasing net fixed assets and decreasing revenue resulted in the observed decline in the net fixed asset turnover ratio. This suggests the company is becoming less efficient at utilizing its fixed assets to generate sales. Potential factors contributing to this trend could include underutilization of existing assets, investments in assets that have not yet yielded expected returns, or a broader decline in operational efficiency. Further investigation into the reasons behind the revenue decline and the nature of the fixed asset investments is warranted.
Total Asset Turnover
United Parcel Service Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Transportation | ||||||
| Total Asset Turnover, Industry | ||||||
| Industrials | ||||||
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
Total asset turnover = Revenue ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The total asset turnover ratio exhibits a generally declining trend over the five-year period. While initially stable, the ratio decreased from 1.40 in 2021 to 1.21 in 2025. This suggests a diminishing efficiency in utilizing assets to generate revenue.
- Overall Trend
- A moderate downward trend is apparent in the total asset turnover ratio. The ratio peaked at 1.41 in 2022 before declining in subsequent years.
- Year-over-Year Changes
- From 2021 to 2022, the ratio experienced a slight increase, moving from 1.40 to 1.41. This indicates a marginal improvement in asset utilization during that period. However, a more substantial decrease occurred between 2022 and 2023, with the ratio falling to 1.28. A minor recovery to 1.30 was observed in 2024, but this was followed by a further decline to 1.21 in 2025.
- Relationship to Revenue
- The decline in the total asset turnover ratio does not directly correlate with a consistent decrease in revenue. Revenue decreased from 2021 to 2023, but remained relatively stable between 2023 and 2025. The decreasing ratio, alongside relatively stable revenue, suggests that asset levels are not efficiently supporting revenue generation.
- Relationship to Total Assets
- Total assets remained relatively stable between 2021 and 2024, fluctuating between US$69.405 billion and US$71.124 billion. A noticeable increase in total assets to US$73.090 billion occurred in 2025. This increase in assets, coupled with a decrease in the total asset turnover ratio, reinforces the observation of diminishing asset efficiency.
The observed trend warrants further investigation to determine the underlying causes of the decreasing asset turnover. Potential factors could include changes in asset composition, inefficiencies in asset management, or shifts in the company’s operational strategy.
Equity Turnover
United Parcel Service Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Equity for controlling interests | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Transportation | ||||||
| Equity Turnover, Industry | ||||||
| Industrials | ||||||
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
Equity turnover = Revenue ÷ Equity for controlling interests
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals fluctuations in revenue alongside changes in equity for controlling interests, impacting the equity turnover ratio over the five-year period. Revenue experienced an initial increase followed by a decline, while equity demonstrated an increase initially, then a subsequent decrease and stabilization. The equity turnover ratio, calculated as revenue divided by equity, exhibits a generally stabilizing trend after initial volatility.
- Revenue Trend
- Revenue increased from US$97,287 million in 2021 to US$100,338 million in 2022, representing a growth of approximately 3.1%. However, a subsequent decline was observed, with revenue falling to US$90,958 million in 2023. This downward trend continued, albeit at a slower pace, reaching US$91,070 million in 2024 and US$88,661 million in 2025. The overall trend indicates a peak in revenue in 2022 followed by a consistent decrease over the subsequent three years.
- Equity Trend
- Equity for controlling interests increased significantly from US$14,253 million in 2021 to US$19,786 million in 2022, a rise of approximately 38.8%. A decrease was then recorded in 2023, with equity falling to US$17,306 million. This decline continued to US$16,718 million in 2024, and further to US$16,227 million in 2025. The trend suggests an initial expansion of equity followed by a period of contraction and eventual stabilization at a level still above the 2021 value.
- Equity Turnover Ratio
- The equity turnover ratio decreased from 6.83 in 2021 to 5.07 in 2022, coinciding with the increase in equity and initial revenue growth. The ratio then experienced a slight increase to 5.26 in 2023, followed by further increases to 5.45 in 2024 and 5.46 in 2025. This indicates a stabilization of the ratio in the latter part of the period, despite the declining revenue. The ratio suggests that for every dollar of equity, approximately US$5.45 to US$5.46 of revenue was generated in 2024 and 2025, respectively. The initial decrease in 2022 suggests a less efficient use of equity in generating revenue, while the subsequent stabilization indicates a consistent level of efficiency despite revenue declines.
In summary, the period examined demonstrates a complex interplay between revenue and equity. While revenue decreased over the latter portion of the period, the equity turnover ratio stabilized, suggesting a consistent, though not improving, efficiency in utilizing equity to generate sales.