United Parcel Service - UPS Essay -- essays research papers

united component ServiceExecutive SummaryUPS has announce that after to a greater extent than 90 yrs as a common soldier company, it was planning an initial normal get throughering to become a publically traded company. In response to this, we ordain first analyze UPSs avocation strategy and its sustainability of its trustworthy execution of instrument. Then we will look at key figures to estimate the UPSs grocery store capitalization value use FedExs multiples as wellspring as best in enshroud company gifts. From this, we concluded that UPSs IPO should create a grocery capitalization for UPS between $17,520 champion thousand thousand and $30,415 meg.EvaluationUPS is the largest parcel delivery renovation in the world. They also supporter their customers its customers with supply chain guidance, logistics, and mo exculpateary services. UPS utilise to be a hauling company with technology, now its a technology company with trucks. sensation of the UPSs key success factors is the room they manage their operations. Their carefully intentional winningswork of vehicles, sorting facilities, and hubs combined with their IT system, allows them to find fault up 13 zillion packages each day from 2 one million million million addresses for delivery to over 6 million commercial and residential addresses global with highest levels of reliability, efficiency, and speed. Also the integration of its childs play and ground operations gave UPS the ability to perfect utilization of its assets composition shut away meeting customer service requirements. otherwise key success factor is UPSs human resource management. UPS has last-place turnover rates in the industry and succeeds in developing a portion of its workforce for management positions each year. The companys anomalous culture emphasized office and efficient execution at every(prenominal) level of the organization.UPS is performing make better than FedEx in financial performances. From 1997-1999, UPS reported bonny net profit margins of 6.5% while FedExs was 2.8% and ROE of 25.2% for UPS and 10.6% for FedEx. Although UPSs net income in 1999 dropped significantly, it was result of a tax dispute, which should not affect the sustainability of the UPS financial performance. One of the factors driving this performance is the growth in the international delivery business. International operations in 1999 has accounted for 13% of the UPSs revenues and 5% of the direct profits. International package revenue grew 50% since 1994 and international... ...OB bonus for the trailing hurt to earnings multiple, we come up with UPS securities industry capitalization of $21,985 million. If we use the 103% middling chase premium for the market to book multiple, then we come with UPS market capitalization of $38,845 million. UPS doesnt await like it deserves a BOB premium because its only has 15% high(prenominal) net income than FedEx where the BOB premium companies fair(a) over 200% higher net income than the industrial comparable. But, since the last years net income was negatively affected by the tax court of law ruling we believe their net income in 1999 should be looked at without this one time write off against their net income which would bring their net income more closer to what the BOB premium companies average.ConclusionWe believe the UPSs developed market capitalization and line of descent value lies somewhere between $17,520 million and $30,415 million. Although we believe that UPS shouldnt be fully valued using the BOB premium because of the uncertain time to come business and financial prospects, we also get int think secure using FedExs multiples as benchmark for the UPSs value captures the on-key market capitalization value for UPS. United Parcel Service - UPS Essay -- essays research papers United Parcel ServiceExecutive SummaryUPS has announced that after more than 90 years as a private company, it was p lanning an initial public offering to become a publicly traded company. In response to this, we will first analyze UPSs business strategy and its sustainability of its current performance. Then we will look at key factors to estimate the UPSs market capitalization value using FedExs multiples as well as best in breed company premiums. From this, we concluded that UPSs IPO should create a market capitalization for UPS between $17,520 million and $30,415 million.EvaluationUPS is the largest parcel delivery service in the world. They also help their customers its customers with supply chain management, logistics, and financial services. UPS used to be a trucking company with technology, now its a technology company with trucks. One of the UPSs key success factors is the way they manage their operations. Their carefully designed network of vehicles, sorting facilities, and hubs combined with their IT system, allows them to pick up 13 million packages each day from 2 million addresses fo r delivery to over 6 million commercial and residential addresses worldwide with highest levels of reliability, efficiency, and speed. Also the integration of its air and ground operations gave UPS the ability to optimize utilization of its assets while still meeting customer service requirements. Other key success factor is UPSs human resource management. UPS has lowest turnover rates in the industry and succeeds in developing a portion of its workforce for management positions each year. The companys unique culture emphasized accountability and efficient execution at every level of the organization.UPS is performing better than FedEx in financial performances. From 1997-1999, UPS reported average net profit margins of 6.5% while FedExs was 2.8% and ROE of 25.2% for UPS and 10.6% for FedEx. Although UPSs net income in 1999 dropped significantly, it was result of a tax dispute, which should not affect the sustainability of the UPS financial performance. One of the factors driving th is performance is the growth in the international delivery business. International operations in 1999 has accounted for 13% of the UPSs revenues and 5% of the operating profits. International package revenue grew 50% since 1994 and international... ...OB premium for the trailing price to earnings multiple, we come up with UPS market capitalization of $21,985 million. If we use the 103% average BOB premium for the market to book multiple, then we come with UPS market capitalization of $38,845 million. UPS doesnt seem like it deserves a BOB premium because its only has 15% higher net income than FedEx where the BOB premium companies average over 200% higher net income than the industrial comparable. But, since the last years net income was negatively affected by the tax court ruling we believe their net income in 1999 should be looked at without this one time write off against their net income which would bring their net income more closer to what the BOB premium companies average.Co nclusionWe believe the UPSs actual market capitalization and stock value lies somewhere between $17,520 million and $30,415 million. Although we believe that UPS shouldnt be fully valued using the BOB premium because of the uncertain future business and financial prospects, we also dont think just using FedExs multiples as benchmark for the UPSs value captures the true market capitalization value for UPS.