Enterprise Value to EBITDA (EV/EBITDA)
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Net Profit Margin since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
- Analysis of Debt
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
United Parcel Service Inc., EBITDA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
- Net Income
- The net income shows a significant surge from 1,343 million US dollars in 2020 to 12,890 million US dollars in 2021. However, it decreases steadily after 2021, falling to 11,548 million in 2022, then declining more sharply to 6,708 million in 2023 and further to 5,782 million in 2024. This indicates a peak in profitability in 2021, followed by a notable downward trend over the subsequent years.
- Earnings Before Tax (EBT)
- The earnings before tax follow a similar pattern as net income, with a marked increase from 1,844 million US dollars in 2020 to 16,595 million in 2021. After peaking, EBT decreases each year to 14,825 million in 2022, then further to 8,573 million in 2023 and 7,442 million in 2024. The decline suggests diminishing pre-tax profits post-2021.
- Earnings Before Interest and Tax (EBIT)
- EBIT rises substantially from 2,545 million US dollars in 2020 to 17,289 million in 2021, then contracts gradually to 15,529 million in 2022. The decline continues more sharply to 9,358 million in 2023 and 8,308 million in 2024. This downward movement after 2021 implies decreased operational profitability excluding interest and tax expenses.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA increases dramatically from 5,243 million US dollars in 2020 to 20,242 million in 2021, representing the highest growth among the metrics. It then reduces to 18,717 million in 2022 and declines further to 12,724 million in 2023 and 11,917 million in 2024. Despite the decline, the EBITDA figures remain significantly higher than the 2020 baseline, indicating a relatively stronger cash flow position even with recent downturns.
- Overall Trend Analysis
- The company experienced a pronounced growth in all profitability measures from 2020 to 2021. However, from 2022 onwards, all metrics display a downward trend with substantial decreases particularly evident in net income and EBT. The EBITDA and EBIT also follow this declining path, suggesting challenges affecting core earnings and cash flow generation after the peak year of 2021. The consistent decline across all earnings indicators may reflect increased costs, reduced revenues, or other operational pressures impacting financial performance in recent years.
Enterprise Value to EBITDA Ratio, Current
United Parcel Service Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Valuation Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| FedEx Corp. | |
| Uber Technologies Inc. | |
| Union Pacific Corp. | |
| United Airlines Holdings Inc. | |
| EV/EBITDA, Sector | |
| Transportation | |
| EV/EBITDA, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
United Parcel Service Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | ||||||
| Valuation Ratio | ||||||
| EV/EBITDA3 | ||||||
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| EV/EBITDA, Sector | ||||||
| Transportation | ||||||
| EV/EBITDA, Industry | ||||||
| Industrials | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a fluctuating downward trend from 2020 to 2024. It peaked in 2021 at approximately 193 billion US dollars, followed by a consistent decline over the next three years, reaching about 114 billion US dollars by the end of 2024. This represents a substantial decrease overall, indicating a reduction in the market valuation or the perceived value of the company's core business operations.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA showed significant variability during the period analyzed. In 2020, it was at a relatively low level of about 5.2 billion US dollars, followed by a substantial increase in 2021 to over 20 billion US dollars. However, the following years saw a declining trend, falling to roughly 11.9 billion US dollars by 2024. Although still higher than the 2020 baseline, the significant drop after 2021 suggests challenges in maintaining operational profitability.
- EV/EBITDA Ratio
- The EV/EBITDA ratio revealed an initial sharp decline from 30.22 in 2020 to a low of 8.83 in 2022, reflecting a transition to a more favorable valuation relative to the company’s EBITDA. However, a temporary increase occurred in 2023, rising to 11.23, before decreasing again to 9.53 in 2024. These fluctuations indicate changes in market perceptions related to the company's earnings capacity relative to its enterprise value.
- Summary and Insights
- Overall, the data indicate that while the company experienced a peak in both valuation and earnings in 2021, subsequent years showed a decline in these key financial metrics. The reduction in enterprise value alongside decreases in EBITDA suggests a possible contraction in business performance or investor confidence. The EV/EBITDA ratio’s volatility highlights varying market assessments of the company’s profitability relative to its valuation during this period. The recent lower ratios could be interpreted as the company becoming more attractively priced relative to its earnings compared to the earlier years.