Stock Analysis on Net
Stock Analysis on Net

Automatic Data Processing Inc. (NASDAQ:ADP)

This company has been moved to the archive! The financial data has not been updated since April 29, 2022.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity 

Automatic Data Processing Inc., common-size consolidated balance sheet: liabilities and stockholders’ equity

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Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Accounts payable 0.29 0.26 0.30 0.37 0.40 0.35
Accrued expenses and other current liabilities 4.03 5.06 4.20 4.17 3.72 2.86
Accrued payroll and payroll-related expenses 1.87 1.42 1.72 1.80 1.51 1.41
Dividends payable 0.80 0.99 0.81 0.81 0.67 0.55
Short-term deferred revenues 0.42 0.54 0.53 0.61 0.63 0.53
Obligations under reverse repurchase agreements 0.05 0.03 0.63 0.00 0.00 0.00
Short-term debt 0.00 2.56 0.00 0.00 0.00 0.00
Income taxes payable 0.12 0.10 0.13 0.12 0.13 0.06
Current liabilities before client funds obligations 7.57% 10.97% 8.32% 7.87% 7.06% 5.76%
Client funds obligations 70.54 65.95 69.58 74.13 73.13 76.33
Current liabilities 78.11% 76.92% 77.89% 82.00% 80.19% 82.09%
Long-term debt 6.12 2.56 4.78 5.40 5.39 4.60
Long-term operating lease liabilities 0.70 0.88 0.00 0.00 0.00 0.00
Other liabilities 1.71 2.14 1.91 1.96 2.23 1.61
Deferred income taxes 0.99 1.87 1.58 0.29 0.44 0.57
Long-term deferred revenues 0.74 0.95 0.95 1.02 1.05 0.87
Noncurrent liabilities 10.27% 8.39% 9.22% 8.67% 9.11% 7.65%
Total liabilities 88.37% 85.31% 87.11% 90.67% 89.30% 89.74%
Preferred stock, $1.00 par value; issued, none 0.00 0.00 0.00 0.00 0.00 0.00
Common stock, $0.10 par value 0.13 0.16 0.15 0.17 0.17 0.15
Capital in excess of par value 3.14 3.41 2.82 2.74 2.33 1.76
Retained earnings 39.88 47.07 41.78 41.18 39.61 32.07
Treasury stock, at cost -31.55 -35.92 -31.25 -32.92 -30.40 -23.22
Accumulated other comprehensive income (loss) 0.02 -0.04 -0.61 -1.84 -1.02 -0.49
Stockholders’ equity 11.63% 14.69% 12.89% 9.33% 10.70% 10.26%
Total liabilities and stockholders’ equity 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

Current Liabilities Trends
The proportion of current liabilities in relation to total liabilities and stockholders’ equity has generally remained significant, accounting for over 75% throughout the periods. Notably, client funds obligations represent the largest component within current liabilities, although their share has declined from 76.33% in 2016 to 70.54% in 2021, indicating a potential shift in liability composition. Other components such as accrued expenses and other current liabilities have increased from 2.86% in 2016 to a peak of 5.06% in 2020 before declining to 4.03% in 2021. Accounts payable showed a slight decline over time, dropping from 0.35% to 0.29%. Short-term deferred revenues fluctuated mildly, remaining under 1% throughout the periods.
Noncurrent Liabilities and Debt
Noncurrent liabilities, including long-term debt and other long-term obligations, exhibited moderate variability. The long-term debt portion initially rose from 4.6% in 2016 to 5.4% in 2018, then decreased considerably to 2.56% in 2020 before increasing sharply to 6.12% in 2021. Long-term operating lease liabilities appeared only from 2020 onward, remaining under 1%. Deferred income taxes showed an unusual increase in 2019 and 2020, reaching 1.87%, but declined to 0.99% in 2021. Overall, total liabilities as a proportion of total liabilities and equity slightly decreased from 89.74% in 2016 to 85.31% in 2020 before rising again to 88.37% in 2021.
Stockholders’ Equity Composition
Stockholders’ equity fluctuated between 9.33% and 14.69% over the period, with a peak in 2020. Retained earnings grew substantially from 32.07% in 2016 to a high of 47.07% in 2020 before diminishing to 39.88% in 2021, indicating accumulation of profits followed by some reduction. Treasury stock consistently represented a significant negative component, fluctuating around -30% to -36%. Capital in excess of par value increased from 1.76% in 2016 to a peak of 3.41% in 2020 but dropped slightly thereafter. Accumulated other comprehensive income (loss) moved from negative figures into a small positive territory by 2021. Common stock remained relatively stable at about 0.13% to 0.17%.
Overall Financial Structure Insights
The company's financial structure is characterized by a dominant liability portion, especially client funds obligations, which constitute the majority of total liabilities and stockholders’ equity. The decreasing trend in client funds obligations coupled with volatile long-term debt levels suggests adjustments in capital and financing strategy over the years. The equity section’s variation reflects changes in retained earnings and treasury stock activity, which affects the net equity percentage. The rise and fall in accrued expenses and deferred taxes indicate shifting operational or tax positions. Despite fluctuations, total liabilities and equity consistently sum to 100%, affirming internal data consistency.