Refer to the financial information of United Parcel Service in PS-41 to answer the following requirements.

REQUIRED

a. Compute its current ratio and quick ratio for 2017 and 2016. Comment on any observed trends.

b. Compute its times interest earned and its debt-to-equity ratios for 2017 and 2016. Comment on any trends observed.

c. Summarize your findings in a conclusion about the company's liquidity and solvency. Do you have any concerns about its ability to meet its debt obligations?

Data from PS-41:

Transcribed Image Text:

UNITED PARCEL SERVICE, INC. Income Statement Years Ended December 31 (S millions) 2017 2016 2015 Revenue. $65,872 S60,906 $58,363 Operating expenses: Compensation and benefits. Repairs and maintenance. Depreciation and amortization Purchased transportation. 34,588 34,770 31,028 1,600 1,538 1,400 2,084 8,043 2,482 2.282 10,989 2,224 9,129 2,118 1,037 4,623 .. Fuel. 2,690 1,155 5,039 Other occupancy 1,022 Other expenses 4,636 ... Total operating expenses. 58,343 55,439 50,695 Operating profit.. Other income and (expense): 7,529 5,467 7,668 Investment income and other. 72 50 15 Interest expense... (453) (381) (341) Total other income and (expense) (381) (331) (326) Income before income taxes 7,148 5,136 7,342 Income tax expense. 2,238 1,705 2,498 Net income $ 4,910 $ 3,431 $ 4,844