Intrinsic value of United Parcel Service Cl B - UPS

Previous Close

$133.08

  Intrinsic Value

$90.56

stock screener

  Rating & Target

sell

-32%

Previous close

$133.08

 
Intrinsic value

$90.56

 
Up/down potential

-32%

 
Rating

sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of UPS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.36
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.77
  5.70
  5.63
  5.56
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
Revenue, $m
  60,906
  65,169
  69,601
  74,209
  79,001
  83,988
  89,179
  94,586
  100,220
  106,094
  112,220
  118,614
  125,289
  132,261
  139,547
  147,162
  155,127
  163,458
  172,176
  181,302
  190,856
  200,863
  211,346
  222,330
  233,840
  245,905
  258,554
  271,815
  285,722
  300,307
  315,606
Variable operating expenses, $m
 
  56,606
  60,430
  64,405
  68,540
  72,843
  77,322
  81,987
  86,848
  91,917
  97,203
  102,344
  108,103
  114,119
  120,405
  126,976
  133,848
  141,037
  148,559
  156,433
  164,677
  173,311
  182,356
  191,833
  201,765
  212,175
  223,088
  234,531
  246,530
  259,115
  272,315
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  55,439
  56,606
  60,430
  64,405
  68,540
  72,843
  77,322
  81,987
  86,848
  91,917
  97,203
  102,344
  108,103
  114,119
  120,405
  126,976
  133,848
  141,037
  148,559
  156,433
  164,677
  173,311
  182,356
  191,833
  201,765
  212,175
  223,088
  234,531
  246,530
  259,115
  272,315
Operating income, $m
  5,467
  8,563
  9,171
  9,803
  10,461
  11,145
  11,857
  12,598
  13,371
  14,177
  15,017
  16,270
  17,186
  18,142
  19,141
  20,186
  21,278
  22,421
  23,617
  24,869
  26,179
  27,552
  28,990
  30,497
  32,076
  33,730
  35,465
  37,285
  39,192
  41,193
  43,291
EBITDA, $m
  7,691
  10,961
  11,707
  12,482
  13,288
  14,126
  15,000
  15,909
  16,857
  17,845
  18,875
  19,950
  21,073
  22,246
  23,471
  24,752
  26,092
  27,493
  28,959
  30,494
  32,101
  33,785
  35,548
  37,395
  39,331
  41,360
  43,488
  45,718
  48,058
  50,511
  53,084
Interest expense (income), $m
  373
  434
  370
  453
  538
  627
  719
  815
  915
  1,020
  1,128
  1,242
  1,360
  1,484
  1,613
  1,748
  1,889
  2,036
  2,191
  2,352
  2,521
  2,698
  2,883
  3,077
  3,281
  3,494
  3,717
  3,952
  4,197
  4,455
  4,725
Earnings before tax, $m
  5,136
  8,130
  8,801
  9,351
  9,923
  10,518
  11,138
  11,783
  12,456
  13,157
  13,889
  15,028
  15,826
  16,658
  17,529
  18,438
  19,390
  20,385
  21,427
  22,517
  23,658
  24,854
  26,107
  27,419
  28,795
  30,236
  31,748
  33,333
  34,995
  36,738
  38,566
Tax expense, $m
  1,705
  2,195
  2,376
  2,525
  2,679
  2,840
  3,007
  3,182
  3,363
  3,553
  3,750
  4,058
  4,273
  4,498
  4,733
  4,978
  5,235
  5,504
  5,785
  6,080
  6,388
  6,711
  7,049
  7,403
  7,775
  8,164
  8,572
  9,000
  9,449
  9,919
  10,413
Net income, $m
  3,431
  5,935
  6,425
  6,826
  7,244
  7,678
  8,131
  8,602
  9,093
  9,605
  10,139
  10,971
  11,553
  12,161
  12,796
  13,460
  14,154
  14,881
  15,641
  16,437
  17,271
  18,144
  19,058
  20,016
  21,020
  22,073
  23,176
  24,333
  25,546
  26,819
  28,153

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,567
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  40,377
  38,312
  40,918
  43,626
  46,444
  49,375
  52,427
  55,606
  58,918
  62,371
  65,973
  69,732
  73,656
  77,755
  82,038
  86,515
  91,197
  96,095
  101,220
  106,585
  112,202
  118,085
  124,248
  130,705
  137,472
  144,565
  152,001
  159,797
  167,973
  176,548
  185,541
Adjusted assets (=assets-cash), $m
  35,810
  38,312
  40,918
  43,626
  46,444
  49,375
  52,427
  55,606
  58,918
  62,371
  65,973
  69,732
  73,656
  77,755
  82,038
  86,515
  91,197
  96,095
  101,220
  106,585
  112,202
  118,085
  124,248
  130,705
  137,472
  144,565
  152,001
  159,797
  167,973
  176,548
  185,541
Revenue / Adjusted assets
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
  1.701
Average production assets, $m
  20,230
  21,636
  23,108
  24,637
  26,228
  27,884
  29,607
  31,402
  33,273
  35,223
  37,257
  39,380
  41,596
  43,911
  46,329
  48,858
  51,502
  54,268
  57,162
  60,192
  63,364
  66,687
  70,167
  73,813
  77,635
  81,641
  85,840
  90,243
  94,860
  99,702
  104,781
Working capital, $m
  2,119
  1,303
  1,392
  1,484
  1,580
  1,680
  1,784
  1,892
  2,004
  2,122
  2,244
  2,372
  2,506
  2,645
  2,791
  2,943
  3,103
  3,269
  3,444
  3,626
  3,817
  4,017
  4,227
  4,447
  4,677
  4,918
  5,171
  5,436
  5,714
  6,006
  6,312
Total debt, $m
  16,075
  10,584
  12,929
  15,367
  17,902
  20,541
  23,288
  26,148
  29,129
  32,237
  35,479
  38,862
  42,393
  46,082
  49,937
  53,967
  58,181
  62,589
  67,201
  72,030
  77,085
  82,380
  87,926
  93,738
  99,828
  106,212
  112,904
  119,921
  127,279
  134,996
  143,090
Total liabilities, $m
  39,972
  34,481
  36,826
  39,264
  41,799
  44,438
  47,185
  50,045
  53,026
  56,134
  59,376
  62,759
  66,290
  69,979
  73,834
  77,864
  82,078
  86,486
  91,098
  95,927
  100,982
  106,277
  111,823
  117,635
  123,725
  130,109
  136,801
  143,818
  151,176
  158,893
  166,987
Total equity, $m
  405
  3,831
  4,092
  4,363
  4,644
  4,938
  5,243
  5,561
  5,892
  6,237
  6,597
  6,973
  7,366
  7,775
  8,204
  8,652
  9,120
  9,610
  10,122
  10,659
  11,220
  11,809
  12,425
  13,071
  13,747
  14,457
  15,200
  15,980
  16,797
  17,655
  18,554
Total liabilities and equity, $m
  40,377
  38,312
  40,918
  43,627
  46,443
  49,376
  52,428
  55,606
  58,918
  62,371
  65,973
  69,732
  73,656
  77,754
  82,038
  86,516
  91,198
  96,096
  101,220
  106,586
  112,202
  118,086
  124,248
  130,706
  137,472
  144,566
  152,001
  159,798
  167,973
  176,548
  185,541
Debt-to-equity ratio
  39.691
  2.760
  3.160
  3.520
  3.850
  4.160
  4.440
  4.700
  4.940
  5.170
  5.380
  5.570
  5.760
  5.930
  6.090
  6.240
  6.380
  6.510
  6.640
  6.760
  6.870
  6.980
  7.080
  7.170
  7.260
  7.350
  7.430
  7.500
  7.580
  7.650
  7.710
Adjusted equity ratio
  -0.025
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,431
  5,935
  6,425
  6,826
  7,244
  7,678
  8,131
  8,602
  9,093
  9,605
  10,139
  10,971
  11,553
  12,161
  12,796
  13,460
  14,154
  14,881
  15,641
  16,437
  17,271
  18,144
  19,058
  20,016
  21,020
  22,073
  23,176
  24,333
  25,546
  26,819
  28,153
Depreciation, amort., depletion, $m
  2,224
  2,398
  2,535
  2,678
  2,827
  2,982
  3,143
  3,311
  3,485
  3,668
  3,858
  3,680
  3,887
  4,104
  4,330
  4,566
  4,813
  5,072
  5,342
  5,625
  5,922
  6,232
  6,558
  6,898
  7,256
  7,630
  8,022
  8,434
  8,865
  9,318
  9,793
Funds from operations, $m
  5,739
  8,332
  8,960
  9,504
  10,071
  10,660
  11,273
  11,912
  12,578
  13,273
  13,997
  14,651
  15,440
  16,264
  17,126
  18,026
  18,968
  19,953
  20,984
  22,063
  23,193
  24,376
  25,616
  26,914
  28,276
  29,703
  31,198
  32,767
  34,412
  36,137
  37,946
Change in working capital, $m
  -734
  85
  89
  92
  96
  100
  104
  108
  113
  117
  123
  128
  134
  139
  146
  152
  159
  167
  174
  183
  191
  200
  210
  220
  230
  241
  253
  265
  278
  292
  306
Cash from operations, $m
  6,473
  8,247
  8,871
  9,412
  9,975
  10,560
  11,170
  11,804
  12,466
  13,155
  13,874
  14,523
  15,307
  16,125
  16,980
  17,874
  18,808
  19,786
  20,809
  21,880
  23,001
  24,176
  25,406
  26,695
  28,046
  29,461
  30,945
  32,502
  34,134
  35,845
  37,640
Maintenance CAPEX, $m
  0
  -1,891
  -2,022
  -2,160
  -2,303
  -2,451
  -2,606
  -2,767
  -2,935
  -3,110
  -3,292
  -3,482
  -3,680
  -3,887
  -4,104
  -4,330
  -4,566
  -4,813
  -5,072
  -5,342
  -5,625
  -5,922
  -6,232
  -6,558
  -6,898
  -7,256
  -7,630
  -8,022
  -8,434
  -8,865
  -9,318
New CAPEX, $m
  -2,965
  -1,407
  -1,471
  -1,530
  -1,591
  -1,656
  -1,723
  -1,795
  -1,871
  -1,950
  -2,034
  -2,123
  -2,216
  -2,315
  -2,419
  -2,528
  -2,644
  -2,766
  -2,894
  -3,030
  -3,172
  -3,322
  -3,480
  -3,647
  -3,822
  -4,006
  -4,199
  -4,403
  -4,617
  -4,842
  -5,079
Cash from investing activities, $m
  -2,566
  -3,298
  -3,493
  -3,690
  -3,894
  -4,107
  -4,329
  -4,562
  -4,806
  -5,060
  -5,326
  -5,605
  -5,896
  -6,202
  -6,523
  -6,858
  -7,210
  -7,579
  -7,966
  -8,372
  -8,797
  -9,244
  -9,712
  -10,205
  -10,720
  -11,262
  -11,829
  -12,425
  -13,051
  -13,707
  -14,397
Free cash flow, $m
  3,907
  4,950
  5,378
  5,723
  6,081
  6,453
  6,840
  7,242
  7,660
  8,095
  8,548
  8,919
  9,410
  9,923
  10,457
  11,015
  11,598
  12,207
  12,843
  13,508
  14,204
  14,932
  15,693
  16,491
  17,326
  18,200
  19,116
  20,076
  21,083
  22,137
  23,243
Issuance/(repayment) of debt, $m
  2,034
  -1,810
  2,345
  2,438
  2,536
  2,638
  2,747
  2,861
  2,981
  3,108
  3,242
  3,383
  3,532
  3,689
  3,855
  4,030
  4,214
  4,408
  4,613
  4,828
  5,056
  5,295
  5,546
  5,811
  6,090
  6,384
  6,692
  7,017
  7,358
  7,717
  8,094
Issuance/(repurchase) of shares, $m
  -2,433
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -497
  -1,810
  2,345
  2,438
  2,536
  2,638
  2,747
  2,861
  2,981
  3,108
  3,242
  3,383
  3,532
  3,689
  3,855
  4,030
  4,214
  4,408
  4,613
  4,828
  5,056
  5,295
  5,546
  5,811
  6,090
  6,384
  6,692
  7,017
  7,358
  7,717
  8,094
Total cash flow (excl. dividends), $m
  3,389
  3,140
  7,723
  8,161
  8,617
  9,092
  9,587
  10,103
  10,641
  11,203
  11,790
  12,301
  12,942
  13,612
  14,312
  15,045
  15,812
  16,615
  17,456
  18,337
  19,259
  20,226
  21,240
  22,302
  23,416
  24,584
  25,809
  27,093
  28,441
  29,854
  31,337
Retained Cash Flow (-), $m
  2,065
  -4,312
  -261
  -271
  -282
  -293
  -305
  -318
  -331
  -345
  -360
  -376
  -392
  -410
  -428
  -448
  -468
  -490
  -513
  -536
  -562
  -588
  -616
  -646
  -677
  -709
  -744
  -780
  -818
  -857
  -899
Prev. year cash balance distribution, $m
 
  886
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -286
  7,462
  7,890
  8,335
  8,799
  9,282
  9,785
  10,310
  10,858
  11,430
  11,926
  12,550
  13,202
  13,884
  14,597
  15,344
  16,125
  16,943
  17,800
  18,698
  19,638
  20,623
  21,656
  22,739
  23,874
  25,065
  26,314
  27,623
  28,997
  30,438
Discount rate, %
 
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
  25.93
PV of cash for distribution, $m
 
  -269
  6,565
  6,450
  6,290
  6,084
  5,836
  5,548
  5,226
  4,874
  4,498
  4,072
  3,676
  3,277
  2,884
  2,503
  2,141
  1,804
  1,495
  1,218
  974
  764
  588
  443
  326
  234
  164
  112
  75
  48
  30
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

United Parcel Service, Inc. (UPS) is a package delivery company. The Company is a provider of global supply chain management solutions. The Company operates through three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. As of December 31, 2016, the Company delivered packages in over 220 countries and territories. The Company offers a spectrum of the United States domestic guaranteed ground and air package transportation services. The International Package segment includes the small package operations in Europe, Asia-Pacific, Canada and Latin America, the Indian sub-continent, the Middle East and Africa. The Supply Chain & Freight segment includes its forwarding and logistics services, truckload freight brokerage, UPS Freight and its financial offerings through UPS Capital. The Company serves the global market for logistics services, which include transportation, distribution, contract logistics and ground freight.

FINANCIAL RATIOS  of  United Parcel Service Cl B (UPS)

Valuation Ratios
P/E Ratio 33.7
Price to Sales 1.9
Price to Book 285.2
Price to Tangible Book
Price to Cash Flow 17.8
Price to Free Cash Flow 32.9
Growth Rates
Sales Growth Rate 4.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 24.6%
Cap. Spend. - 3 Yr. Gr. Rate 7.5%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 3060.2%
Total Debt to Equity 3969.1%
Interest Coverage 15
Management Effectiveness
Return On Assets 9.4%
Ret/ On Assets - 3 Yr. Avg. 10.7%
Return On Total Capital 20.6%
Ret/ On T. Cap. - 3 Yr. Avg. 24.4%
Return On Equity 238.7%
Return On Equity - 3 Yr. Avg. 173.1%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 81.5%
Gross Margin - 3 Yr. Avg. 80.8%
EBITDA Margin 12.7%
EBITDA Margin - 3 Yr. Avg. 13.8%
Operating Margin 9%
Oper. Margin - 3 Yr. Avg. 10.2%
Pre-Tax Margin 8.4%
Pre-Tax Margin - 3 Yr. Avg. 9.7%
Net Profit Margin 5.6%
Net Profit Margin - 3 Yr. Avg. 6.4%
Effective Tax Rate 33.2%
Eff/ Tax Rate - 3 Yr. Avg. 33.9%
Payout Ratio 77%

UPS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UPS stock intrinsic value calculation we used $60906 million for the last fiscal year's total revenue generated by United Parcel Service Cl B. The default revenue input number comes from 2016 income statement of United Parcel Service Cl B. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our UPS stock valuation model: a) initial revenue growth rate of 7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.3%, whose default value for UPS is calculated based on our internal credit rating of United Parcel Service Cl B, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of United Parcel Service Cl B.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of UPS stock the variable cost ratio is equal to 86.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for UPS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for United Parcel Service Cl B.

Corporate tax rate of 27% is the nominal tax rate for United Parcel Service Cl B. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the UPS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for UPS are equal to 33.2%.

Life of production assets of 10.7 years is the average useful life of capital assets used in United Parcel Service Cl B operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for UPS is equal to 2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $405 million for United Parcel Service Cl B - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 861.016 million for United Parcel Service Cl B is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of United Parcel Service Cl B at the current share price and the inputted number of shares is $114.6 billion.

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COMPANY NEWS

▶ "Fast Money" final trades: JNJ, INTC and more   [Jan-17-18 05:59PM  CNBC Videos]
▶ Mechanics to McConnell: UPS execs got raises, but we didn't   [Jan-11-18 02:20PM  American City Business Journals]
▶ United Parcel Service Getting Closer To Key Technical Measure   [03:00AM  Investor's Business Daily]
▶ Airfreight traffic soars on demand   [01:04PM  Yahoo Finance Video]
▶ What Makes Tesla's Business Model Different?   [Jan-08-18 01:45PM  Investopedia]
▶ [$$] FedEx on Track to Deliver Outsize Returns   [Jan-06-18 12:01AM  Barrons.com]
▶ Delta, UPS among 14 companies sharing $228M federal transportation contract   [Jan-05-18 02:10PM  American City Business Journals]
▶ [$$] Trump Criticizes Post Office for Charging Amazon So Little   [Dec-29-17 11:30PM  The Wall Street Journal]
▶ Vetr Issues a 'Hold' Upgrade On UPS   [Dec-26-17 01:01PM  Benzinga]
▶ We Should All Have Problems Like FedEx   [11:00AM  Barrons.com]
▶ Holiday delivery scorecard: FedEx vs. UPS   [07:09AM  CNBC Videos]
▶ UPS enlisted office workers to deliver last minute Christmas packages   [Dec-25-17 08:10PM  American City Business Journals]
▶ Holiday crunch time arrives for FedEx and UPS   [Dec-22-17 01:18PM  CNBC Videos]
▶ FedEx Sees Growth Ahead   [09:24AM  Motley Fool]
▶ Top NYSE Transport Dividend Payers   [08:02AM  Simply Wall St.]
▶ UPDATE: UPS partners with Ryan Seacrest to grant one more holiday wish (Video)   [Dec-21-17 03:24PM  American City Business Journals]
▶ Why FedEx Corporation Is a Good GARP Name   [09:08AM  InvestorPlace]
▶ These 3 Shipping Stocks Could Deliver Happy Returns in 2018   [Dec-20-17 12:14PM  TheStreet.com]
▶ Tesla lands huge semi-truck order from UPS   [10:49AM  Yahoo Finance Video]
▶ Tesla Semi Truck Orders Continue to Roll In   [02:04PM  InvestorPlace]
▶ UPS pre-orders 125 Tesla electric trucks   [01:27PM  CNBC Videos]
▶ 3 Stocks to Buy on a Dip?   [10:32AM  Motley Fool]
▶ UPS makes big bet on Tesla, pre-ordering 125 electric trucks   [10:25AM  American City Business Journals]
▶ UPS Pre-Orders 125 Tesla Electric Trucks   [09:00AM  GlobeNewswire]
▶ FedEx Analysts: Why Theyre Recommending a Buy   [07:31AM  Market Realist]
▶ [$$] Delivery Companies Brace for the Pre-Christmas Crush   [12:30AM  The Wall Street Journal]
▶ 3 Earnings Reports to Watch Next Week   [Dec-15-17 01:48PM  InvestorPlace]
▶ Can FedExs Operating Margins Be Higher in Fiscal 2Q18?   [Dec-14-17 12:59PM  Market Realist]
▶ UPS and Teamsters clash over 70-hour, 8-day holiday schedule   [Dec-13-17 06:20PM  American City Business Journals]
▶ What to Do if Your Holiday Package Is Stolen   [11:10AM  TheStreet.com]
▶ Here are UPS and Amazon's holiday shipping deadlines   [Dec-12-17 02:00PM  American City Business Journals]
▶ 4 Top Stocks You Can Buy on Sale for 2018   [06:01AM  Motley Fool]
Financial statements of UPS
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