If it does not provide a positive, present cash flow, the asset is written down using a fair assessment value. UPS looks at long-lived assets for impairment only when the final carrying value of the asset will be not be recovered using an undiscounted future cash flow assessment of the asset’s returns. Construction work in progress – no depreciation since these are charged to expenses Equipment and Furniture/fixtures – straight line depreciation, useful life for vehicles are between 6 to 15 years, aircraft, 12 to 30 years, plant equipment from 6 to 8.25 years, technology equipment from 3 to 5 years Improvements other than buildings – straight line depreciation, depending on term of improvements or lease Buildings – straight line depreciation, useful life of 20 to 40 years Fixed Assets The fixed assets are grouped and depreciated as follows: The company does not record any inventory flow system for these materials since they are consumable and are not stored for long periods of time. These materials are charged as expense items when used in operations and are recorded as “other current assets” in the company’s balance sheet. From 2012 to 2011, the receivables turnover improved marginally which meant that the company may not have changed much of its operating policies towards providing credit to its clients.įor UPS, the inventories are jet fuel, diesel and unleaded gasoline which are valued at the average market cost of these materials. The smaller the receivables ratio, the better it is for the company since it is collecting from its clients at a more efficient rate. This means that the company can cover its receivables with its gross revenues almost 400 plus times. For 2011, the receivable turnover is 235.3 times. The receivables turnover for 2011 is calculated the same way, by taking present year’s gross revenues and dividing it by the difference between the ARs of the current and previous years. The receivables turnover for 2012 is 8443.7 times. Thee company’s provision for doubtful accounts charged to expense during the same period was $155, $147 and $199 million, respectively. According to the company’s yearend financial statements, the company total allowance for doubtful accounts from Decemand 2011 was $127 and $117 million, respectively. The company also reports that it holds cash equivalents in subsidiaries in and outside the United States.īased on the accounts receivables of the company, the percentage of uncollected for the current year is 2% of AR and for the previous year, about 1.8% of the AR. These are for the acquisition of a new company in the coming period.

The short-term investments of the company increased from 711M in 2010 to 1,241M in 2011 (75% growth) and then decreased to 597M in 2012 (52% decrease).Īccording to the company’s year-end financial report the company holds cash and cash equivalents in European subsidiaries.

According to the company’s financial statements, the cash equivalents that are held by UPS as declared in their balance sheet are “short term investments” which can be various types of commercial paper. The term cash equivalents refer to assets held by the company that can be converted into cash within three (3) months.

Fixed asset turnover ratio ups