UPS Deliverable 1 Submission

Ups had a drastically higher pe ratio at the end of

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that there is a huge abnormality in both UPS and Fed-Ex. UPS had a drastically higher P/E ratio at the end of 2007 as any of its competitors as well as any previous or post ratios. This seems odd, however, the same can be said at the end of the 2008 year for Fed- Ex. This is important because during those two abnormally high years investors must have liked the direction of the company because of its ability to multiply invested money.
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However, while Fed-Ex followed up with a respectable ratio the following year, UPS managed its smallest ratio the year after the high ratio figure. Pension Fund Status Funded Status = Fair Value of Plan Assets at end of year – Projected Benefit Obligation (PBO) at end of year. Funded status = $20,092- 21,342= (1,250) · Discount rate 6.58% · Expected return on plan assets 8.75% · Rate of salary increase 4.50% · Target allocation · Actual allocation For the UPS Retirement Plan, we use a market-related valuation method for recognizing investment gains or losses. Investment gains or losses are the difference between the expected and actual return based on the market- related value of assets. This method recognizes investment gains or losses over a five year period from the year in which they occur, which reduces year-to-year volatility in pension expense. Thus, a portion of the investment losses we incurred during 2008 will be deferred through 2012. Our expense in future periods will be impacted as gains or losses are recognized in the market-related value of assets.
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