Name: Automatic Data Processing Inc. (NASDAQ:ADP) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

Balance Sheet: Liabilities and Stockholders’ Equity

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.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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

US$ in thousands

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Accounts payable	141,100)	102,000)	125,500)	135,400)	149,700)	152,300)
Accrued expenses and other current liabilities	1,963,300)	1,980,700)	1,759,000)	1,547,700)	1,381,900)	1,246,800)
Accrued payroll and payroll-related expenses	910,200)	557,000)	721,100)	667,700)	562,500)	616,700)
Dividends payable	390,800)	387,300)	340,100)	298,900)	250,500)	238,400)
Short-term deferred revenues	203,900)	212,500)	220,700)	226,500)	232,900)	233,200)
Obligations under reverse repurchase agreements	23,500)	13,600)	262,000)	—)	—)	—)
Short-term debt	—)	1,001,800)	—)	—)	—)	—)
Income taxes payable	58,200)	40,100)	54,800)	43,900)	49,000)	28,200)
Current liabilities before client funds obligations	3,691,000)	4,295,000)	3,483,200)	2,920,100)	2,626,500)	2,515,600)
Client funds obligations	34,403,800)	25,831,600)	29,144,500)	27,493,500)	27,189,400)	33,331,800)
Current liabilities	38,094,800)	30,126,600)	32,627,700)	30,413,600)	29,815,900)	35,847,400)
Long-term debt	2,985,000)	1,002,800)	2,002,200)	2,002,400)	2,002,400)	2,007,700)
Long-term operating lease liabilities	343,200)	344,400)	—)	—)	—)	—)
Other liabilities	834,100)	837,000)	798,700)	728,000)	830,200)	701,100)
Deferred income taxes	482,900)	731,900)	659,900)	107,300)	163,100)	251,100)
Long-term deferred revenues	362,400)	370,600)	399,300)	377,800)	391,400)	381,100)
Noncurrent liabilities	5,007,600)	3,286,700)	3,860,100)	3,215,500)	3,387,100)	3,341,000)
Total liabilities	43,102,400)	33,413,300)	36,487,800)	33,629,100)	33,203,000)	39,188,400)
Preferred stock, $1.00 par value; issued, none	—)	—)	—)	—)	—)	—)
Common stock, $0.10 par value	63,900)	63,900)	63,900)	63,900)	63,900)	63,900)
Capital in excess of par value	1,531,300)	1,333,800)	1,183,200)	1,014,800)	867,800)	768,100)
Retained earnings	19,451,100)	18,436,300)	17,500,600)	15,271,300)	14,728,200)	14,003,300)
Treasury stock, at cost	(15,386,800)	(14,067,000)	(13,090,500)	(12,209,600)	(11,303,700)	(10,138,600)
Accumulated other comprehensive income (loss)	10,600)	(14,800)	(257,300)	(680,800)	(379,200)	(215,100)
Stockholders’ equity	5,670,100)	5,752,200)	5,399,900)	3,459,600)	3,977,000)	4,481,600)
Total liabilities and stockholders’ equity	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).

The financial position from 2016 to 2021 is characterized by a substantial volume of current liabilities, predominantly driven by client funds obligations, and a consistent growth in retained earnings offset by aggressive treasury stock acquisitions.

Current Liabilities and Client Funds: Current liabilities exhibit significant volatility, primarily due to fluctuations in client funds obligations. These obligations represent the largest single component of the balance sheet, ranging from a low of approximately 25.8 billion USD in 2020 to a peak of 34.4 billion USD in 2021. Aside from these funds, accrued expenses and other current liabilities showed a steady upward trajectory from 1.25 billion USD in 2016 to nearly 2 billion USD by 2020. Accrued payroll and payroll-related expenses also experienced a sharp increase in 2021, reaching 910.2 million USD, the highest level in the analyzed period.
Non-Current Liabilities and Debt Profile: Non-current liabilities remained relatively stable between 2016 and 2020, fluctuating between 3.2 billion USD and 3.8 billion USD, before increasing significantly to 5.0 billion USD in 2021. This increase is largely attributed to a rise in long-term debt, which surged to 2.98 billion USD in 2021 after having decreased to 1.0 billion USD in 2020. The introduction of long-term operating lease liabilities in 2020, valued at 344.4 million USD, also contributed to the non-current liability structure.
Stockholders' Equity and Capital Management: Stockholders' equity demonstrates a pattern of recovery and growth, moving from 4.48 billion USD in 2016 to 5.67 billion USD in 2021. A primary driver of equity growth is the consistent increase in retained earnings, which rose from 14 billion USD in 2016 to 19.45 billion USD in 2021. This growth is partially offset by a sustained increase in treasury stock at cost, which grew from negative 10.1 billion USD to negative 15.38 billion USD, indicating a consistent program of share repurchases. Capital in excess of par value also trended upward, doubling from 768.1 million USD in 2016 to 1.53 billion USD in 2021.
Total Liabilities and Financial Leverage: Total liabilities experienced a net increase over the six-year period, ending at 43.1 billion USD in 2021 compared to 39.2 billion USD in 2016. The most pronounced expansion occurred between 2020 and 2021, where total liabilities grew by nearly 9.7 billion USD. This growth was fueled by simultaneous increases in both client funds obligations and long-term debt, resulting in an expansion of the total balance sheet to 48.77 billion USD by June 30, 2021.

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