Case $2$: The Battle for Value, $2016$: FedEx Corp. versus United Parcel Service, Inc.

Instruction: Complete the below information. In the conclusion section, answer the following question: If Buffett had to choose between investing in FedEx or UPS, which would he choose? And, how does your investment decision, FedEx or UPS, compare to Precision Parts?

Business Description:

UPS:

FedEx:

Competition$/$Industry:

Free Cash Flow Comparison:

UPS

$2012$

$2013$

$2014$

$2015$

Sales

EBIT

Taxes $(32\%)$

NOPAT

Current Assets $(1)$

Current Liabilities

PPE, Net

Total Net Operating Capital

Change in TNOC

Free Cash Flow

Assume $100\%$ of cash and marketable securities is an operating asset.

Page $2$

FedEx

$2012$

$2013$

$2014$

$2015$

Sales

EBIT

Taxes $(32\%)$

NOPAT

Current Assets $(1)$

Current Liabilities

PPE, Net

Total Net Operating Capital

Change in TNOC

Free Cash Flow

Assume $100\%$ of cash and marketable securities is an operating asset.

Financial Ratio Comparison:

UPS

$2012$

$2013$

$2014$

$2015$

NOPAT Margin

Total Asset Turnover

Return on Assets

FedEx

$2012$

$2013$

$2014$

$2015$

NOPAT Margin

Total Asset Turnover

Return on Assets

Comments on Free Cash Flow and Ratio Comparison:

Page $3$

Conclusion: