United Parcel Debt
UPS Stock | USD 116.76 1.53 1.33% |
United Parcel Service holds a debt-to-equity ratio of 1.405. At this time, United Parcel's Short and Long Term Debt is comparatively stable compared to the past year. Interest Debt Per Share is likely to gain to 28.10 in 2025, whereas Net Debt is likely to drop slightly above 10 B in 2025. . United Parcel's financial risk is the risk to United Parcel stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
United Parcel's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. United Parcel's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps United Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect United Parcel's stakeholders.
For most companies, including United Parcel, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for United Parcel Service, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, United Parcel's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Total Current Liabilities is likely to drop to about 10.6 B in 2025. Liabilities And Stockholders Equity is likely to drop to about 44.8 B in 2025United |
United Parcel Bond Ratings
United Parcel Service financial ratings play a critical role in determining how much United Parcel have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for United Parcel's borrowing costs.Piotroski F Score | 6 | Healthy | View |
Beneish M Score | (2.44) | Unlikely Manipulator | View |
United Parcel Service Debt to Cash Allocation
Many companies such as United Parcel, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
United Parcel Service has 22.02 B in debt with debt to equity (D/E) ratio of 1.41, which is OK given its current industry classification. United Parcel Service has a current ratio of 1.36, which is typical for the industry and considered as normal. Note however, debt could still be an excellent tool for United to invest in growth at high rates of return. United Parcel Total Assets Over Time
United Parcel Assets Financed by Debt
The debt-to-assets ratio shows the degree to which United Parcel uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.United Parcel Debt Ratio | 22.0 |
United Parcel Corporate Bonds Issued
United Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning United Parcel Use of Financial Leverage
United Parcel's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to United Parcel's current equity. If creditors own a majority of United Parcel's assets, the company is considered highly leveraged. Understanding the composition and structure of United Parcel's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last Reported | Projected for Next Year | ||
Short and Long Term Debt Total | 22 B | 14.3 B | |
Net Debt | 15.9 B | 10 B | |
Short Term Debt | 2.6 B | 2.1 B | |
Long Term Debt | 19.4 B | 12.5 B | |
Long Term Debt Total | 19.9 B | 16.3 B | |
Short and Long Term Debt | 1.8 B | 2.6 B | |
Net Debt To EBITDA | 1.33 | 0.78 | |
Debt To Equity | 1.32 | 1.25 | |
Interest Debt Per Share | 26.76 | 28.10 | |
Debt To Assets | 0.31 | 0.22 | |
Long Term Debt To Capitalization | 0.54 | 0.42 | |
Total Debt To Capitalization | 0.57 | 0.44 | |
Debt Equity Ratio | 1.32 | 1.25 | |
Debt Ratio | 0.31 | 0.22 | |
Cash Flow To Debt Ratio | 0.46 | 0.77 |
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Additional Tools for United Stock Analysis
When running United Parcel's price analysis, check to measure United Parcel's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy United Parcel is operating at the current time. Most of United Parcel's value examination focuses on studying past and present price action to predict the probability of United Parcel's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move United Parcel's price. Additionally, you may evaluate how the addition of United Parcel to your portfolios can decrease your overall portfolio volatility.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.