Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Automatic Data Processing Inc. (NASDAQ:ADP)

Analysis of Property, Plant and Equipment

Advanced level

Property, Plant and Equipment Disclosure

Automatic Data Processing Inc., balance sheet: property, plant and equipment

US$ in thousands

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Land and buildings 737,200  781,200  791,800  778,100  745,700  730,600 
Data processing equipment 847,900  749,000  707,400  653,700  605,000  588,500 
Furniture, leaseholds and other 643,600  651,600  637,100  599,600  490,100  457,300 
Property, plant and equipment at cost 2,228,700  2,181,800  2,136,300  2,031,400  1,840,800  1,776,400 
Accumulated depreciation (1,524,800) (1,417,600) (1,342,600) (1,251,500) (1,155,800) (1,103,700)
Property, plant and equipment, net 703,900  764,200  793,700  779,900  685,000  672,700 

Based on: 10-K (filing date: 2020-08-05), 10-K (filing date: 2019-08-09), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-04), 10-K (filing date: 2016-08-05), 10-K (filing date: 2015-08-07).

Item Description The company
Property, plant and equipment at cost Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Automatic Data Processing Inc.’s property, plant and equipment at cost increased from 2018 to 2019 and from 2019 to 2020.
Property, plant and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Automatic Data Processing Inc.’s property, plant and equipment, net decreased from 2018 to 2019 and from 2019 to 2020.

Asset Age Ratios (Summary)

Automatic Data Processing Inc., asset age ratios

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Average age ratio 68.42% 64.97% 62.85% 61.61% 62.79% 62.13%
Estimated total useful life (years) 12 12 12 14 14 14
Estimated age, time elapsed since purchase (years) 8 8 8 8 9 9
Estimated remaining life (years) 4 4 5 5 5 5

Based on: 10-K (filing date: 2020-08-05), 10-K (filing date: 2019-08-09), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-04), 10-K (filing date: 2016-08-05), 10-K (filing date: 2015-08-07).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Automatic Data Processing Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Automatic Data Processing Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 and from 2019 to 2020.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Automatic Data Processing Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.
Estimated remaining life Automatic Data Processing Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 and from 2019 to 2020.

Average Age

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in thousands)
Accumulated depreciation 1,524,800  1,417,600  1,342,600  1,251,500  1,155,800  1,103,700 
Property, plant and equipment at cost 2,228,700  2,181,800  2,136,300  2,031,400  1,840,800  1,776,400 
Asset Age Ratio
Average age1 68.42% 64.97% 62.85% 61.61% 62.79% 62.13%

Based on: 10-K (filing date: 2020-08-05), 10-K (filing date: 2019-08-09), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-04), 10-K (filing date: 2016-08-05), 10-K (filing date: 2015-08-07).

2020 Calculations

1 Average age = 100 × Accumulated depreciation ÷ Property, plant and equipment at cost
= 100 × 1,524,800 ÷ 2,228,700 = 68.42%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Automatic Data Processing Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in thousands)
Property, plant and equipment at cost 2,228,700  2,181,800  2,136,300  2,031,400  1,840,800  1,776,400 
Depreciation of property, plant and equipment 192,800  180,600  173,100  147,300  135,600  127,200 
Asset Age Ratio (Years)
Estimated total useful life1 12 12 12 14 14 14

Based on: 10-K (filing date: 2020-08-05), 10-K (filing date: 2019-08-09), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-04), 10-K (filing date: 2016-08-05), 10-K (filing date: 2015-08-07).

2020 Calculations

1 Estimated total useful life = Property, plant and equipment at cost ÷ Depreciation of property, plant and equipment
= 2,228,700 ÷ 192,800 = 12

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Automatic Data Processing Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 and from 2019 to 2020.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in thousands)
Accumulated depreciation 1,524,800  1,417,600  1,342,600  1,251,500  1,155,800  1,103,700 
Depreciation of property, plant and equipment 192,800  180,600  173,100  147,300  135,600  127,200 
Asset Age Ratio (Years)
Time elapsed since purchase1 8 8 8 8 9 9

Based on: 10-K (filing date: 2020-08-05), 10-K (filing date: 2019-08-09), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-04), 10-K (filing date: 2016-08-05), 10-K (filing date: 2015-08-07).

2020 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation of property, plant and equipment
= 1,524,800 ÷ 192,800 = 8

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Automatic Data Processing Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in thousands)
Property, plant and equipment, net 703,900  764,200  793,700  779,900  685,000  672,700 
Depreciation of property, plant and equipment 192,800  180,600  173,100  147,300  135,600  127,200 
Asset Age Ratio (Years)
Estimated remaining life1 4 4 5 5 5 5

Based on: 10-K (filing date: 2020-08-05), 10-K (filing date: 2019-08-09), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-04), 10-K (filing date: 2016-08-05), 10-K (filing date: 2015-08-07).

2020 Calculations

1 Estimated remaining life = Property, plant and equipment, net ÷ Depreciation of property, plant and equipment
= 703,900 ÷ 192,800 = 4

Asset age ratio Description The company
Estimated remaining life Automatic Data Processing Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 and from 2019 to 2020.