Return on Equity (ROE)
since 2005
Calculation
Automatic Data Processing Inc., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net earnings1 | ÷ | Stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Jun 30, 2021 | 45.83% | = | 100 | × | 2,598,500) | ÷ | 5,670,100) |
| Jun 30, 2020 | 42.88% | = | 100 | × | 2,466,500) | ÷ | 5,752,200) |
| Jun 30, 2019 | 42.46% | = | 100 | × | 2,292,800) | ÷ | 5,399,900) |
| Jun 30, 2018 | 46.85% | = | 100 | × | 1,620,800) | ÷ | 3,459,600) |
| Jun 30, 2017 | 43.59% | = | 100 | × | 1,733,400) | ÷ | 3,977,000) |
| Jun 30, 2016 | 33.30% | = | 100 | × | 1,492,500) | ÷ | 4,481,600) |
| Jun 30, 2015 | 30.21% | = | 100 | × | 1,452,500) | ÷ | 4,808,500) |
| Jun 30, 2014 | 22.73% | = | 100 | × | 1,515,900) | ÷ | 6,670,200) |
| Jun 30, 2013 | 22.71% | = | 100 | × | 1,405,800) | ÷ | 6,189,900) |
| Jun 30, 2012 | 22.71% | = | 100 | × | 1,388,500) | ÷ | 6,114,000) |
| Jun 30, 2011 | 20.87% | = | 100 | × | 1,254,200) | ÷ | 6,010,400) |
| Jun 30, 2010 | 22.11% | = | 100 | × | 1,211,400) | ÷ | 5,478,900) |
| Jun 30, 2009 | 25.04% | = | 100 | × | 1,332,600) | ÷ | 5,322,600) |
| Jun 30, 2008 | 24.29% | = | 100 | × | 1,235,700) | ÷ | 5,087,200) |
| Jun 30, 2007 | 22.12% | = | 100 | × | 1,138,700) | ÷ | 5,147,900) |
| Jun 30, 2006 | 25.85% | = | 100 | × | 1,554,000) | ÷ | 6,011,600) |
| Jun 30, 2005 | 18.25% | = | 100 | × | 1,055,400) | ÷ | 5,783,800) |
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), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
1 US$ in thousands
Net earnings exhibited a consistent long-term upward trajectory, growing from $1.055 billion in 2005 to $2.598 billion by 2021. While growth was steady for the first decade, a significant acceleration occurred between 2018 and 2019, where earnings increased by approximately 41% in a single fiscal year.
- Return on Equity (ROE) Trends
- The ROE demonstrated two distinct operational phases. From 2005 to 2014, the ratio remained relatively stable, fluctuating within a range of 18.25% to 25.85%. Starting in 2015, a sharp escalation began, with ROE climbing from 30.21% to a peak of 46.85% in 2018, before stabilizing in a high plateau between 42.46% and 45.83% from 2019 through 2021.
- Equity Base Dynamics
- Stockholders' equity showed significant volatility between 2014 and 2019. After reaching a peak of $6.670 billion in 2014, equity entered a period of contraction, declining to $3.460 billion by 2018. This reduction in the equity base served as a primary driver for the spike in ROE during this interval. A sharp recovery occurred in 2019, with equity returning to $5.399 billion and remaining stable thereafter.
- Profitability and Capital Efficiency
- The sustained high ROE observed from 2019 to 2021, despite the recovery of the stockholders' equity base, indicates a fundamental increase in profitability. The ability to maintain ROE above 42% while equity returned to levels near $5.7 billion suggests that the growth in net earnings outperformed the expansion of the capital base, reflecting enhanced capital efficiency and stronger earnings power in the latter part of the analyzed period.
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Comparison to Competitors
Automatic Data Processing Inc., ROE, long-term trends, comparison to competitors
| Automatic Data Processing Inc. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jun 30, 2021 | 45.83% | 30.25% | 32.59% | 1.66% | 25.39% | -1.99% | 30.38% | 20.89% | 43.15% | 262.43% | -22.71% | -78.63% | 9.81% | 6.22% | 14.31% | -8.62% |
| Jun 30, 2020 | 42.88% | 30.05% | 39.66% | — | 23.69% | -2.56% | 27.14% | 35.76% | 37.43% | 83.94% | -76.61% | -24.23% | 0.37% | 4.18% | 13.54% | -19.33% |
| Jun 30, 2019 | 42.46% | 33.17% | 28.03% | — | 47.03% | -2.14% | 45.25% | 41.53% | 38.35% | 50.87% | — | -5.16% | 7.11% | 29.45% | 13.04% | -21.36% |
| Jun 30, 2018 | 46.85% | 39.17% | 27.67% | — | 26.84% | — | 51.96% | 51.44% | 20.03% | 8.37% | — | -15.30% | 1.36% | -2.40% | 12.43% | -20.33% |
| Jun 30, 2017 | 43.59% | 38.50% | 20.02% | — | 20.63% | — | 32.70% | 71.71% | 29.29% | 17.33% | — | -28.52% | 2.40% | -25.53% | 4.17% | -35.11% |
| Jun 30, 2016 | 33.30% | 54.42% | 15.74% | — | 27.38% | — | 65.07% | 84.32% | 23.33% | 18.82% | — | -28.60% | -0.95% | -116.76% | 8.35% | -25.52% |
| Jun 30, 2015 | 30.21% | 49.78% | 8.99% | — | 18.34% | — | 92.48% | 15.65% | 15.23% | 20.42% | — | -33.81% | -6.61% | -35.01% | 7.21% | -22.02% |
| Jun 30, 2014 | 22.73% | 51.32% | 3.96% | — | 11.92% | — | 101.30% | 29.47% | 24.59% | 23.37% | — | -48.33% | -7.64% | -41.85% | 8.48% | -14.53% |
| Jun 30, 2013 | 22.71% | 66.16% | 4.31% | — | 14.21% | — | 72.32% | 24.30% | 27.69% | 24.47% | — | -10.74% | -11.67% | -18.70% | 8.89% | -20.12% |
| Jun 30, 2012 | 22.71% | 61.59% | 12.49% | — | 48.07% | — | 88.04% | 28.86% | 25.58% | 22.85% | — | 0.32% | -0.73% | -15.34% | 7.29% | — |
| Jun 30, 2011 | 20.87% | 58.72% | 14.40% | — | 17.57% | — | 78.73% | 24.24% | 40.55% | 21.49% | — | — | 5.05% | — | 10.53% | — |
| Jun 30, 2010 | 22.11% | 62.79% | 14.92% | — | 45.74% | — | 64.36% | 20.35% | 40.63% | 19.92% | — | — | 7.73% | — | 11.29% | — |
| Jun 30, 2009 | 25.04% | 55.08% | 7.90% | — | -138.29% | — | 59.31% | 17.49% | 36.83% | 22.29% | — | — | 6.46% | — | 9.09% | — |
| Jun 30, 2008 | 24.29% | 66.59% | 19.77% | — | -1,818.25% | — | 91.60% | 23.00% | 48.73% | 23.98% | — | — | 4.06% | — | 12.43% | — |
| Jun 30, 2007 | 22.12% | 60.25% | 15.57% | — | 14.24% | — | 36.59% | 21.62% | 45.23% | 25.26% | — | — | 0.17% | — | 9.08% | — |
| Jun 30, 2006 | 25.85% | 51.38% | 9.82% | — | 8.39% | — | 33.30% | 23.99% | 31.42% | 22.52% | — | — | 14.50% | — | 2.13% | — |
| Jun 30, 2005 | 18.25% | 55.42% | 32.34% | — | 2.67% | — | 23.97% | 22.51% | 25.47% | 26.63% | — | — | 5.06% | — | -1.27% | — |
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), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Sector (Software & Services)
Automatic Data Processing Inc., ROE, long-term trends, comparison to sector (software & services)
| Automatic Data Processing Inc. | Software & Services | |
|---|---|---|
| Jun 30, 2021 | 45.83% | 35.91% |
| Jun 30, 2020 | 42.88% | 30.34% |
| Jun 30, 2019 | 42.46% | 35.56% |
| Jun 30, 2018 | 46.85% | 20.20% |
| Jun 30, 2017 | 43.59% | 23.83% |
| Jun 30, 2016 | 33.30% | 26.25% |
| Jun 30, 2015 | 30.21% | 23.04% |
| Jun 30, 2014 | 22.73% | 28.09% |
| Jun 30, 2013 | 22.71% | 31.71% |
| Jun 30, 2012 | 22.71% | 32.66% |
| Jun 30, 2011 | 20.87% | 38.82% |
| Jun 30, 2010 | 22.11% | 37.89% |
| Jun 30, 2009 | 25.04% | 35.98% |
| Jun 30, 2008 | 24.29% | 44.03% |
| Jun 30, 2007 | 22.12% | 35.48% |
| Jun 30, 2006 | 25.85% | 28.87% |
| Jun 30, 2005 | 18.25% | 24.91% |
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), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Industry (Information Technology)
Automatic Data Processing Inc., ROE, long-term trends, comparison to industry (information technology)
| Automatic Data Processing Inc. | Information Technology | |
|---|---|---|
| Jun 30, 2021 | 45.83% | 41.64% |
| Jun 30, 2020 | 42.88% | 35.38% |
| Jun 30, 2019 | 42.46% | 35.94% |
| Jun 30, 2018 | 46.85% | 30.23% |
| Jun 30, 2017 | 43.59% | 23.19% |
| Jun 30, 2016 | 33.30% | 23.00% |
| Jun 30, 2015 | 30.21% | 25.97% |
| Jun 30, 2014 | 22.73% | 25.43% |
| Jun 30, 2013 | 22.71% | 24.73% |
| Jun 30, 2012 | 22.71% | 26.09% |
| Jun 30, 2011 | 20.87% | 29.03% |
| Jun 30, 2010 | 22.11% | 27.62% |
| Jun 30, 2009 | 25.04% | 20.05% |
| Jun 30, 2008 | 24.29% | 25.24% |
| Jun 30, 2007 | 22.12% | 23.67% |
| Jun 30, 2006 | 25.85% | 22.58% |
| Jun 30, 2005 | 18.25% | 21.92% |
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), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).