MANAGERIAL ACCOUNTING

Managerial Accounting

Managerial Accounting

Federal Express (FedEx) was formed in 1973 as an express delivery company. It then evolved to a global logistics and supply management company. The success of the Company was highly attributable to its extensive track records of investments and innovations in IT systems. The Company was able to link players in the supply chain and identified points along the supply chain where it could provide management services. Despite this, their logistics business was struggling in performance and failed to generate profit.

Market Positioning

FedEx's marketing strategy is based on providing elaborate logistics management and fuller supply chain solutions through its five subsidiaries. Instead of sub-contracting their shipments and information systems development to a third party, FedEx differentiates from its competitors by focusing on building up their information systems and their own fleet of transportation.

FedEx encouraged its customers to integrate its systems to their businesses. In return, customers will be able to reduce inventory, save time and warehousing costs. At the same time, innovative customers were demanding for greater integration of FedEx's systems. FedEx was able to design and develop customised software for their customers in order to enhance integration, such as an extranet for Cicso Systems.

FedEx is a company built around the use of technology. Continuous research and development of innovative software have helped the Company reach its success. As a result, FedEx was able to link its networks to enable sharing of information between departments and within departments in the company to increase operating efficiency, reduce costs and also to improve customer services.

Financial Performance

For 2005

Financial Analysis 2000 1999 1998

Sales Growth 8.84% 5.67% 11.48%

ROE 14.38% 13.54% 12.69%

ROA 10.79% 10.88% 10.57%

Gearing ratio 0.370 .290 .35

Interest Cover Ratio 11.7 11.8 8.23

From the table above, sales growth has improved significantly in 2000 compared to 1999, from 6% to 9%. The decline in sales ...