UPS, DHL, and Purolator are three different businesses in the same industry as FedEx. Similarly, to FedEx,
Question:
UPS, DHL, and Purolator are three different businesses in the same industry as FedEx. Similarly, to FedEx, these businesses are in the delivery service industry and specialize in express package delivery service (Wei, 2023). The business structures of all these businesses are corporation. According to Breen et al. (2022), corporations are "considered to be separate from its owners, the shareholders, who, unlike the sole proprietor or a partner, have limited liability and are not personally responsible for the debts or obligations of the corporation" (p. 185).
Like FedEx, all three of the businesses are organized into separate subsidiaries. For example, UPS has UPS Airlines and UPS Capital, DHL has DHL Express and DHL Freight, and Purolator has Purolator Ground and Purolator Express. These subsidiaries oversee the different sectors of the corporation that allows the corporation to function efficiently.
Identify two current issues relating to your business that arise from this type of business structure. (Raella)
Since FedEx is considered as a corporation, the two risks that a corporation like FedEx could face are lengthy application and double taxation. To be a corporation, you must separate filing of taxes, annual meetings of shareholders and the ongoing recordkeeping obligations required for regulatory compliance. These extensive paperwork's can take up to years to complete and finalize. The double taxation, meaning the business income is taxed as an entity as well as the shareholder level (Schooley, 2022). Since inflation is happening right now, FedEx is facing a lot of problems with expenses on fuel for flight and the FedEx Ground flight unit is having difficulties with the declining profit margins since 2012 (Black, 2022).
Another current issue relating our business is the CEO change last year. Investors are frustrated with the new CEO because of his overly optimistic view on FedEx's shares as well as his economic forecasting ability (Baertlein, 2022). Shares dropped more than 16% in the first quarter of last year (Gomes & Baertlein, 2022). This issue may cause disruptions on decision making as well as gaining revenue on the already reclining sales of FedEx.
Identify at least 3 different businesses in industry and look at their business structure.
International Financial Reporting and Analysis
ISBN: 978-1408075012
5th edition
Authors: David Alexander, Anne Britton, Ann Jorissen