Case Assignment 1 - Fedex vs. UPS Answer the following questions with substantial responses that utilize data from the case to support your points. Your submission should be two to three pages in...

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Case Assignment 1 - Fedex vs. UPS





Answer the following questions with substantial responses that utilize data from the case to support your points. Your submission should be two to three pages in length, excluding exhibits. Submit through the Turnitin Link in the Assignments section of the course.


  1. Describe the competition in the overnight package-delivery industry, and the strategies by which those two firms are meeting the competition. Discuss at least one enabling and inhibiting factor facing the two firms as they pursue their goals? Do you think that either firm can attain a sustainable competitive advantage in this business?(Refer to specific data from the case to support your points.)

  2. How are FedEx and UPS performing financially? Which firm is doing better? Discuss the insights you derived from the two firms’ financial statements, financial ratios, economic profit, and stock-price performance. Complete the table below and refer to the information in your discussion.






































































































































































































































































































    2011



    2011



    2015



    2015



    UPS



    FedEx



    UPS



    FedEx


    Revenue


    53,105



    39,304


    58,363



    47,453


    Operating income (EBIT)


    6,080



    2,378


    7,668



    1,867


    Interest expense


    348



    86


    341



    235


    Net income


    3,804



    1,452


    4,844



    1,050


    Capital expenditures


    2,005



    3,434


    2,379



    4,347












    Cash and marketable securities


    4,275



    2,328


    4,726



    3,763


    Accounts receivable


    6,246



    4,581


    7,134



    5,719


    Total current assets


    12,284



    8,285


    13,208



    10,941


    Net prop., plant, and equip.


    17,621



    15,543


    18,352



    20,875


    Total assets


    34,077



    27,385


    38,311



    37,069












    Current liabilities


    6,514



    4,882


    10,696



    5,957


    Total debt


    11,128



    1,685


    14,334



    7,268


    Total stockholders’ equity


    7,108



    15,220


    2,491



    14,993















    UPS



    FedEx



    UPS



    FedEx



    Growth










    Revenue growth












    Total asset growth












    Operating income growth












    Net income growth

























    Asset Efficiency Ratios












    Working capital turnover












    PPE turnover












    Capital expenditure %












    Total asset turnover

























    Liquidity and Leverage Ratios












    Current ratio












    Cash ratio












    Total debt/equity ratio












    Times interest earned













  3. If you had to identify one of those companies as excellent, which company would you choose? On what basis did you make your decision? (Refer to at least threespecific data points from the table above to support your choice.)Discuss long term vs. recent performance as well as stock price performance.

  4. What do you estimate the revenue growth rate and Net Profit Margin to be for each firm over the next year? What is your estimation based on?







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Answered Same DaySep 26, 2022

Answer To: Case Assignment 1 - Fedex vs. UPS Answer the following questions with substantial responses that...

Prince answered on Sep 26 2022
52 Votes
Q1
    As mentioned in the industry overview, the package-delivery industry is a highly profitable industry that is estimated to be worth $90 billion. UPS and FedEx are major competitors in the United States and the international market. They face an intense rivalry against each other. Both companies are customer focused, technology driven, and price competitive. They are both in a strong financial position and aim to provide high returns to their shareholders.
FedEx and UPS have different strategic approaches, as further analyzed in the company overview section. FedEx emphasizes their innovative, entrepreneurial, and operational leadership as key to providing pristine service to their customers. UPS, on the other hand, focuses on efficiency and cost reduction.
The enabling and inhibiting factors the two firms face can be seen in the SWOT analysis, with the strengths and opportunities being there enabling factors and the weaknesses and threats being their inhibiting factors. Due to the similarities between the companies’ strategies and factors in the industry, it is unlikely that one firm will attain a sustainable competitive advantage in the business. Even if one company comes out with a new advancement and strategy, there other one is consistently there to follow in its tracks or do something else.
Q2
        2011    2011    2015    2015
        UPS    FedEx    UPS    FedEx        The total assets turnover ratio determines the amount of sales that are generated from each dollar of assets. The average of this ratio for the period 2011-2015 for FedEx is 1.34 and UPS is 1.54, indicating that UPS is more capable of utilizing its assets to generate sales. The current ratio measures a company's ability to...
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