Return on Assets:

Trend Analysis: FedExs return on asset ratio has increased from 1.75% to reach 4.45% from the years 2019 to 2021. This increase can be seen due to an increase in sales as seen in the common size balance sheet.

Comparative Analysis: In comparison to FedEx, the return on asset ratio of UPS is much greater, wherein it is 18.57% in the same year 2021. For UPS, this shows that it has more advantage on this part where it is able to use its increased assets to get higher return.

Return on Equity DuPont Analysis :

Trend Analysis: Return on equity ratios for FedEx increased to more than double the amount in years 2019 to 2021 where the ratio was 7.03% in 2019 and grew to 15.34% in 2021. This indicates the that the company has started generating its profits and managing its finances based on equity instead of debt.

This second graph shows the DuPont Analysis Ratios which summarizes the factors that play a role in the increasing return on equity ratio throughout years 2019 to 2021. Profit margin has changed into a higher percentage from 1.86% to 4.09% in 2021 and since it is the most drastic change and increase between the two other factors (total asset turnover and equity multiplier), we can deduce that the profit margin is the main factor in the growth of return on equity ratios for FedEx as it also fluctuates in a similar manner.

Comparative Analysis: Profit margin for UPS is 13.25% much higher than FedExs (4.09%). Also, being dominant in both the total asset turnover and equity multiplier factors is the reason why UPSs ROE is extremely higher than FedExs ROE, where UPSs ROE is 90.34% while FedExs ROE is 15.34%. This shows that UPS is dominant and leading in the management of assets and the return generated by FedEx is much less than the return UPS generates as they are completely uneven.

Price Earnings Ratio:

Trend Analysis: in 2021, FedExs price-earnings ratio decreases to 17.788 when it was initially 30.734 in 2019. And while the ratio is still moderate, it can be concluded that even though the ratio decreased to 17.788 times its net income, showing that less investors became keen on paying for stock, however 17.788 is still a considered a good PE ratio and until now investors still seemed willing to invest in the company at this amount.

Comparative Analysis: Price-earnings ratio for UPS is 14.532 which is less than FedExs PE ratio (17.788). In regard to their net income, we can conclude that investors value FedEx more and they are more willing to invest in FedEx rather than UPS. In conclusion, FedEx dominates UPS in this aspect.

Enterprise Value Ratio:

Trend Analysis: FedExs enterprise value almost doubled in increase from 39.60 in 2019 to 67.17 in 2021. This indicates that an increase in the companys financial performance and activities as well as its operating assets led to this. In addition, an increase in the companys value is noted.

Comparative Analysis: UPS has a much bigger enterprise value (186.46) than FedEx (67.17) and it is clearly pointed out due to a difference of 119.29. This aligns with the information that mentions that UPS is a bigger company than FedEx.

Based on the analysis what do you recommend to FEDEX ?