United Parcel Service - UPS Essay -- essays research papers

United Parcel ServiceExecutive SummaryUPS has announced that after much than 90 years as a private company, it was intend an initial public offering to become a publicly traded company. In response to this, we depart first analyze UPSs pipeline strategy and its sustainability of its current performance. Then we will look at recognise factors to estimate the UPSs commercialise capitalisation value using FedExs multiples as well up as best in breed company grants. From this, we concluded that UPSs IPO should fabricate a market capitalisation for UPS between $17,520 million and $30,415 million. ratingUPS is the largest parcel manner of speaking service in the world. They also help their customers its customers with supply chain management, logistics, and fiscal services. UPS drug abused to be a trucking company with technology, at one time its a technology company with trucks. One of the UPSs key success factors is the steering they manage their operations. Their carefully designed sackwork of vehicles, sorting facilities, and hubs combine with their IT system, allows them to pick up 13 million packages each day from 2 million addresses for delivery to over 6 million commercial and residential addresses oecumenic 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 period 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 good execution at every level of the organization.UPS is performing get around 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 ne t income in 1999 dropped significantly, it was result of a taxation dispute, which should not affect the sustainability of the UPS financial performance. One of the factors driving this performance is the growth in the foreign 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 cost 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 two hundred% 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 keep open off against their net income which would bring their net income more closer to what the BOB premium companies average. outcomeWe believe the UPSs actual market capitalization and phone line value lies somewhere between $17,520 million and $30,415 million. Although we believe that UPS shouldnt be fully wanted 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. 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 planning 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 w ill 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 for 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 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 operating profits. International packag e 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.ConclusionWe 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 B OB 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.