United Parcel Service Inc. (UPS)
Short-term (Operating) Activity Analysis
Difficulty: Beginner
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Ratios (Summary)
United Parcel Service Inc., short-term (operating) activity ratios
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | United Parcel Service Inc.’s inventory turnover improved from 2016 to 2017 and from 2017 to 2018. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | United Parcel Service Inc.’s receivables turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | United Parcel Service Inc.’s payables turnover declined from 2016 to 2017 and from 2017 to 2018. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | United Parcel Service Inc.’s working capital turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | United Parcel Service Inc.’s average receivable collection period deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | United Parcel Service Inc.’s operating cycle deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | United Parcel Service Inc.’s average payables payment period increased from 2016 to 2017 and from 2017 to 2018. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | United Parcel Service Inc.’s cash conversion cycle improved from 2016 to 2017 and from 2017 to 2018. |
Inventory Turnover
United Parcel Service Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Cost of revenue | 19,930 | 16,434 | 13,822 | 12,947 | 14,758 | |
| Inventories | 421 | 404 | 342 | 308 | 344 | |
| Ratio | ||||||
| Inventory turnover1 | 47.34 | 40.68 | 40.42 | 42.04 | 42.90 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| CSX Corp. | 11.46 | 8.00 | 6.89 | 9.47 | 15.02 | |
| FedEx Corp. | 46.59 | 42.83 | 34.93 | 34.10 | 36.83 | |
| Union Pacific Corp. | 6.70 | 5.68 | 5.23 | 6.02 | 8.56 | |
| Inventory Turnover, Sector | ||||||
| Industrial Transportation | 26.85 | 22.40 | 19.22 | 19.91 | 23.44 | |
| Inventory Turnover, Industry | ||||||
| Industrials | 4.19 | 4.43 | 4.49 | 4.28 | 4.56 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Inventory turnover = Cost of revenue ÷ Inventories
= 19,930 ÷ 421 = 47.34
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | United Parcel Service Inc.’s inventory turnover improved from 2016 to 2017 and from 2017 to 2018. |
Receivables Turnover
United Parcel Service Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Revenue | 71,861 | 65,872 | 60,906 | 58,363 | 58,232 | |
| Accounts receivable, net | 8,958 | 8,773 | 7,695 | 7,134 | 6,661 | |
| Ratio | ||||||
| Receivables turnover1 | 8.02 | 7.51 | 7.92 | 8.18 | 8.74 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| CSX Corp. | 12.13 | 11.76 | 11.80 | 12.03 | 11.22 | |
| FedEx Corp. | 7.72 | 7.94 | 6.94 | 8.30 | 8.35 | |
| Union Pacific Corp. | 13.01 | 14.23 | 15.85 | 16.09 | 14.89 | |
| Receivables Turnover, Sector | ||||||
| Industrial Transportation | 8.53 | 8.43 | 8.30 | 9.18 | 9.45 | |
| Receivables Turnover, Industry | ||||||
| Industrials | 7.92 | 6.39 | 6.59 | 6.57 | 7.01 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Receivables turnover = Revenue ÷ Accounts receivable, net
= 71,861 ÷ 8,958 = 8.02
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | United Parcel Service Inc.’s receivables turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Payables Turnover
United Parcel Service Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Cost of revenue | 19,930 | 16,434 | 13,822 | 12,947 | 14,758 | |
| Accounts payable | 5,188 | 3,872 | 3,042 | 2,587 | 2,754 | |
| Ratio | ||||||
| Payables turnover1 | 3.84 | 4.24 | 4.54 | 5.00 | 5.36 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| CSX Corp. | 3.17 | 3.51 | 3.48 | 4.34 | 4.85 | |
| FedEx Corp. | 8.22 | 8.00 | 5.89 | 8.22 | 8.65 | |
| Union Pacific Corp. | 5.70 | 4.20 | 3.92 | 5.97 | 6.95 | |
| Payables Turnover, Sector | ||||||
| Industrial Transportation | 5.24 | 5.38 | 4.87 | 6.12 | 6.52 | |
| Payables Turnover, Industry | ||||||
| Industrials | 6.66 | 6.77 | 7.32 | 7.68 | 7.41 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= 19,930 ÷ 5,188 = 3.84
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | United Parcel Service Inc.’s payables turnover declined from 2016 to 2017 and from 2017 to 2018. |
Working Capital Turnover
United Parcel Service Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Current assets | 16,210 | 15,548 | 13,849 | 13,208 | 11,808 | |
| Less: Current liabilities | 14,087 | 12,708 | 11,730 | 10,696 | 8,639 | |
| Working capital | 2,123 | 2,840 | 2,119 | 2,512 | 3,169 | |
| Revenue | 71,861 | 65,872 | 60,906 | 58,363 | 58,232 | |
| Ratio | ||||||
| Working capital turnover1 | 33.85 | 23.19 | 28.74 | 23.23 | 18.38 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| CSX Corp. | 18.85 | 543.24 | 24.76 | 11.65 | 27.25 | |
| FedEx Corp. | 17.62 | 12.81 | 12.65 | 9.52 | 10.42 | |
| Union Pacific Corp. | — | 317.01 | — | 23.61 | 26.25 | |
| Working Capital Turnover, Sector | ||||||
| Industrial Transportation | 28.62 | 20.80 | 21.88 | 14.78 | 15.75 | |
| Working Capital Turnover, Industry | ||||||
| Industrials | 7.46 | 5.08 | 5.16 | 5.68 | 2.66 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Working capital turnover = Revenue ÷ Working capital
= 71,861 ÷ 2,123 = 33.85
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | United Parcel Service Inc.’s working capital turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Average Inventory Processing Period
United Parcel Service Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 47.34 | 40.68 | 40.42 | 42.04 | 42.90 | |
| Ratio (no. of days) | ||||||
| Average inventory processing period1 | 8 | 9 | 9 | 9 | 9 | |
| Benchmarks (no. of days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| CSX Corp. | 32 | 46 | 53 | 39 | 24 | |
| FedEx Corp. | 8 | 9 | 10 | 11 | 10 | |
| Union Pacific Corp. | 54 | 64 | 70 | 61 | 43 | |
| Average Inventory Processing Period, Sector | ||||||
| Industrial Transportation | 14 | 16 | 19 | 18 | 16 | |
| Average Inventory Processing Period, Industry | ||||||
| Industrials | 87 | 82 | 81 | 85 | 80 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 47.34 = 8
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. |
Average Receivable Collection Period
United Parcel Service Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 8.02 | 7.51 | 7.92 | 8.18 | 8.74 | |
| Ratio (no. of days) | ||||||
| Average receivable collection period1 | 45 | 49 | 46 | 45 | 42 | |
| Benchmarks (no. of days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| CSX Corp. | 30 | 31 | 31 | 30 | 33 | |
| FedEx Corp. | 47 | 46 | 53 | 44 | 44 | |
| Union Pacific Corp. | 28 | 26 | 23 | 23 | 25 | |
| Average Receivable Collection Period, Sector | ||||||
| Industrial Transportation | 43 | 43 | 44 | 40 | 39 | |
| Average Receivable Collection Period, Industry | ||||||
| Industrials | 46 | 57 | 55 | 56 | 52 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 8.02 = 45
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | United Parcel Service Inc.’s average receivable collection period deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Operating Cycle
United Parcel Service Inc., operating cycle calculation, comparison to benchmarks
No. of days
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 8 | 9 | 9 | 9 | 9 | |
| Average receivable collection period | 45 | 49 | 46 | 45 | 42 | |
| Ratio | ||||||
| Operating cycle1 | 53 | 58 | 55 | 54 | 51 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| CSX Corp. | 62 | 77 | 84 | 69 | 57 | |
| FedEx Corp. | 55 | 55 | 63 | 55 | 54 | |
| Union Pacific Corp. | 82 | 90 | 93 | 84 | 68 | |
| Operating Cycle, Sector | ||||||
| Industrial Transportation | 57 | 59 | 63 | 58 | 55 | |
| Operating Cycle, Industry | ||||||
| Industrials | 133 | 139 | 136 | 141 | 132 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 8 + 45 = 53
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | United Parcel Service Inc.’s operating cycle deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Average Payables Payment Period
United Parcel Service Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 3.84 | 4.24 | 4.54 | 5.00 | 5.36 | |
| Ratio (no. of days) | ||||||
| Average payables payment period1 | 95 | 86 | 80 | 73 | 68 | |
| Benchmarks (no. of days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| CSX Corp. | 115 | 104 | 105 | 84 | 75 | |
| FedEx Corp. | 44 | 46 | 62 | 44 | 42 | |
| Union Pacific Corp. | 64 | 87 | 93 | 61 | 53 | |
| Average Payables Payment Period, Sector | ||||||
| Industrial Transportation | 70 | 68 | 75 | 60 | 56 | |
| Average Payables Payment Period, Industry | ||||||
| Industrials | 55 | 54 | 50 | 48 | 49 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.84 = 95
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | United Parcel Service Inc.’s average payables payment period increased from 2016 to 2017 and from 2017 to 2018. |
Cash Conversion Cycle
United Parcel Service Inc., cash conversion cycle calculation, comparison to benchmarks
No. of days
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 8 | 9 | 9 | 9 | 9 | |
| Average receivable collection period | 45 | 49 | 46 | 45 | 42 | |
| Average payables payment period | 95 | 86 | 80 | 73 | 68 | |
| Ratio | ||||||
| Cash conversion cycle1 | -42 | -28 | -25 | -19 | -17 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| CSX Corp. | -53 | -27 | -21 | -15 | -18 | |
| FedEx Corp. | 11 | 9 | 1 | 11 | 12 | |
| Union Pacific Corp. | 18 | 3 | 0 | 23 | 15 | |
| Cash Conversion Cycle, Sector | ||||||
| Industrial Transportation | -13 | -9 | -12 | -2 | -1 | |
| Cash Conversion Cycle, Industry | ||||||
| Industrials | 78 | 85 | 86 | 93 | 83 | |
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).
1 2018 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 8 + 45 – 95 = -42
2 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | United Parcel Service Inc.’s cash conversion cycle improved from 2016 to 2017 and from 2017 to 2018. |