Name: Automatic Data Processing Inc. (NASDAQ:ADP) | Balance Sheet: Assets
Creator: Stock Analysis on Net

Balance Sheet: Assets

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Assets are resources controlled by the company as a result of past events and from which future economic benefits are expected to flow to the entity.

Assets: Selected Items

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Current Assets: Selected Items

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Automatic Data Processing Inc., consolidated balance sheet: assets

US$ in thousands

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Cash and cash equivalents	2,575,200)	1,908,500)	1,949,200)	2,170,000)	2,780,400)	3,191,100)
Accounts receivable, net of allowance for doubtful accounts	2,727,400)	2,441,300)	2,439,300)	1,984,200)	1,703,600)	1,742,800)
Other current assets	533,400)	506,200)	519,600)	758,000)	883,200)	725,300)
Current assets before funds held for clients	5,836,000)	4,856,000)	4,908,100)	4,912,200)	5,367,200)	5,659,200)
Funds held for clients	34,905,800)	26,708,100)	29,434,200)	27,137,800)	27,291,500)	33,841,200)
Current assets	40,741,800)	31,564,100)	34,342,300)	32,050,000)	32,658,700)	39,500,400)
Long-term receivables, net of allowance for doubtful accounts	11,500)	18,600)	23,800)	25,500)	28,000)	27,100)
Property, plant and equipment, net	684,500)	703,900)	764,200)	793,700)	779,900)	685,000)
Operating lease right-of-use asset	462,200)	493,700)	—)	—)	—)	—)
Deferred contract costs	2,498,200)	2,401,600)	2,428,500)	—)	—)	—)
Other assets	825,800)	458,400)	934,400)	1,089,600)	1,352,200)	1,241,300)
Goodwill	2,338,400)	2,309,400)	2,323,000)	2,243,500)	1,741,000)	1,682,000)
Intangible assets, net	1,210,100)	1,215,800)	1,071,500)	886,400)	620,200)	534,200)
Noncurrent assets	8,030,700)	7,601,400)	7,545,400)	5,038,700)	4,521,300)	4,169,600)
Total assets	48,772,500)	39,165,500)	41,887,700)	37,088,700)	37,180,000)	43,670,000)

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).

Total assets exhibited a fluctuating but overall upward trajectory between June 30, 2016, and June 30, 2021, increasing from US$ 43.67 billion to US$ 48.77 billion. This growth was characterized by a contraction period between 2017 and 2020, followed by a substantial expansion in the final fiscal year.

Current Asset Composition and Liquidity: Current assets are heavily dominated by funds held for clients, which fluctuate in alignment with client activity and payroll cycles. These funds reached a period low of US$ 26.71 billion in 2020 before surging to US$ 34.91 billion in 2021. Conversely, operational liquidity in the form of cash and cash equivalents showed a general downward trend from US$ 3.19 billion in 2016 to a low of US$ 1.91 billion in 2020, before recovering to US$ 2.58 billion in 2021.
Operational Receivables: A consistent upward trend is observed in accounts receivable, which grew from US$ 1.74 billion in 2016 to US$ 2.73 billion in 2021. This steady increase suggests an expansion in the volume of services provided or a shift in the timing of collections from clients.
Noncurrent Asset Expansion: Noncurrent assets experienced significant growth, nearly doubling from US$ 4.17 billion in 2016 to US$ 8.03 billion in 2021. This growth is primarily attributed to the introduction of deferred contract costs starting in 2019, which stabilized at approximately US$ 2.4 billion to US$ 2.5 billion. Additionally, there is a clear upward trend in intangible assets and goodwill, which combined increased from US$ 2.22 billion in 2016 to US$ 3.55 billion in 2021, indicating a strategy of growth through acquisitions.
Fixed and Other Assets: Property, plant, and equipment remained relatively stable, ending the period at US$ 684.5 million, nearly identical to the 2016 level of US$ 685.0 million. This indicates a low-capital-intensity operational model. The introduction of operating lease right-of-use assets in 2020 (US$ 493.7 million) reflects changes in accounting standards regarding lease recognition.

The overall asset structure indicates a business model heavily reliant on fiduciary assets, while the growth in noncurrent assets reflects a strategic shift toward capitalizing contract costs and integrating acquired intangible value.

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