Free «Assets of FedEx Corporation» UK Essay Paper
Table of Contents
FedEx Corporation presents the value of its assets in the stock market. The position and price for the corporate stocks vary according to rapid continuous economic changes and stock market shifts. The dynamic market activity of the company attests the specific appeal of the business. As the company provides postal, express, and logistic services around the world, its stocks demonstrate good steady growth. Assets of the company cause its active market activity while property and equipment reflect wide opportunities for investments in this profitable business.
Stock Market Activity
A weekly market activity of the FedEx Corporation is guided by its stock price. Each last day of a workweek, the closing price changed from October 1, 2014 to September 30, 2015 (Appendix A). Closing price in October, 2014 was $144.45, but it increased by 12.6 percent in September, 2015. The smooth pace of FedEx price was diluted by a steady decline at the turn of each year. On Fridays, the price increased by certain points regarding other working days following the expectations of potential investors.
The same tendency was inherent to closing S&P 500 for the same Fridays. The steady dynamics of prices changed at the turn of 2015. It was sharply decreased in October, 2015. Overall reduction was four percent during the period.
According to the comparative data, the company varies its closing price from high to low position. At the turn of each year, FedEx Corporation faced the reduction of closing price due to the common dynamics of S&P 500, which is reiterated by the company. Z-score of FedEx Corporation is almost 3.5. This figure means that its stocks are in safe zone and is close to its maximum 4.8 that was during the last thirteen years.
Historical path of closing price of FedEx Corporation was smoother than the same indicator of S&P 500. The fluctuations of closing price were affected by their interdependence and the changes in the financial market during the period. As FedEx Corporation is one of the largest providers of express transportation and timely delivery, its stocks are considered as profitable and appeal in the stock market. Therefore, the weekly fluctuations replicate the dynamics of S&P 500 companies, engaged in numerous countries as a contractor or the object of investment interest. Decrease in financial activity is witnessed in the middle of 2015. The common purchasing power of investors collapsed in the turn of financial years. Therefore, the price was closed at the low level to stimulate the demand for the stocks.
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Property, Plant, and Equipment
Annual accumulated depreciation increased from $ 19.6 million in May, 2013 to $ 21.1 million in May, 2014. Next year, the amount of accumulated depreciation increased to $ 21.9 million in May, 2015 (FedEx Corp (FDX) Accumulated Depreciation, 2015). Quarterly accumulated depreciation of the tangibles of FedEx Corporation decreased from the beginning of 2015. It totaled more than & 22.2 million in February 2015 but then declined to $ 21.9 million in May, 2015. Later, it increased to $ 22.5 million in August, 2015. The expense on the majority of additional tangibles, their improvements and modifications is capitalized if it extends the asset’s useful life.
Total assets of FedEx Corporation include aircraft and its related equipment, package handling and equipment of ground support, electronic equipment, computers, facilities, vehicles, and other tangibles. They constitute the material base of the corporation and its capital resources.
Current assets for the last three years are contained in the Appendix B. These are cash and cash equivalents, spare parts, fuel and supplies, deferred taxes on income, receivables, prepaid expenses, and other current assets (FedEx 2012 Annual Report, 2013; FedEx 2014 Annual Report, 2015). Total current assets totaled $ 9,056 million in 2012, but then it increased to $ 11,274 million in May, 2013. In a year, it declined to $ 9,683 million.
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The ongoing period indicated in the balance sheet does not reflect any significant changes caused by investment activity of FedEx Corporation. The company did not perform any discontinuous operation, but its business acquisitions increased due to the purchase of other companies. Therefore, net of cash acquired increased from $116 million in 2012 to $483 million in 2013. Moreover, the company invested its own development in a smooth and steady manner during a year.
To value its inventories, the company uses a straight-line method based on the service life of tangibles or related term of lease. Estimation of inventories’ value may be computed through the acceleration when applicable. The company prefers to evaluate its inventories though the costs towards the end of the financial accounted period that is approximately close to current costs. Therefore, the value of inventories of the corporation is based on the materials’ costs bought earlier during a year. The influence of inflation fluctuations makes the costs of inventories higher and net income lower.
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Total inventory value in 2012 was $440 million, but it increased to $ 457 million in 2013. Later, inventory value totaled $ 463 million (FedEx 2012 Annual Report, 2013; FedEx 2014 Annual Report, 2015). A gradual increase was caused by appropriate business growth and emerged necessity to provide operating activities with inventories. The percentage of inventories to total assets in 2012 was 1.47 percent, while this percentage decreased to 1.36 percent in the next year. Later, it increased to 1.4 percent in 2014. Nevertheless, inventories were changed along with the shift of total assets. Therefore, this percentage should be considered taking into account both changes.
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