Automatic Data Processing Inc. (ADP)

Statement of Cash Flows

Difficulty: Beginner

The cash flow statement provides information about a company’s cash receipts and cash payments during an accounting period, showing how these cash flaws link the ending cash balance to the beginning balance shown on the company’s statement of financial position.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Automatic Data Processing Inc., Consolidated Statement of Cash Flows

USD $ in thousands

	12 months ended	Jun 30, 2018		Jun 30, 2017		Jun 30, 2016		Jun 30, 2015		Jun 30, 2014		Jun 30, 2013
	Net earnings
	Depreciation and amortization
	Deferred income taxes
	Stock-based compensation expense
	Excess tax benefit related to exercise of stock options and restricted stock
	Net pension expense
	Net amortization of premiums and accretion of discounts on available-for-sale securities
	Goodwill impairment
	Gain on sale of assets
	Gain on sale of divested businesses, net of tax
	Other
	(Increase) decrease in accounts receivable
	(Increase) decrease in other assets
	Increase (decrease) in accounts payable
	Increase (decrease) in accrued expenses and other liabilities
	Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses
	Proceeds from the sale of notes receivable
	Operating activities of discontinued operations
	Adjustments to reconcile net earnings to cash flows provided by operating activities
	Net cash flows provided by operating activities
	Purchases of corporate and client funds marketable securities
	Proceeds from the sales and maturities of corporate and client funds marketable securities
	Net (increase) decrease in restricted cash and cash equivalents held to satisfy client funds obligations
	Capital expenditures
	Additions to intangibles
	Acquisitions of businesses, net of cash acquired
	Proceeds from the sale of property, plant, and equipment and other assets
	Dividend received from CDK Global, Inc.
	Cash retained by CDK Global, Inc.
	Other
	Proceeds from the sale of divested businesses
	Investing activities of discontinued operations
	Net cash flows (used in) provided by investing activities
	Net increase (decrease) in client funds obligations
	Proceeds from debt issuance
	Payments of debt
	Repurchases of common stock
	Net proceeds from stock purchase plan and stock-based compensation plans
	Excess tax benefit related to exercise of stock options and restricted stock
	Dividends paid
	Net proceeds (repayments) from reverse repurchase agreements
	Net proceeds from issuance (repayments) of commercial paper
	Other
	Financing activities of discontinued operations
	Net cash flows provided by (used in) financing activities
	Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents
	Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents
	Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of year
	Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of year

Based on: 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), 10-K (filing date: 2014-08-08), 10-K (filing date: 2013-08-19).

Item	Description	The company
Net cash flows provided by operating activities	Amount of cash inflow (outflow) from operating activities, excluding discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.	Automatic Data Processing Inc.’s net cash flows provided by operating activities increased from 2016 to 2017 and from 2017 to 2018.
Net cash flows (used in) provided by investing activities	Amount of cash inflow (outflow) of investing activities, excluding discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets.	Automatic Data Processing Inc.’s net cash flows (used in) provided by investing activities increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.
Net cash flows provided by (used in) financing activities	Amount of cash inflow (outflow) of financing activities, excluding discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.	Automatic Data Processing Inc.’s net cash flows provided by (used in) financing activities declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality