Analysis of Geographic Areas
Automatic Data Processing Inc. operates in 4 regions: United States; Europe; Canada; and Other.
Area Asset Turnover
Automatic Data Processing Inc., asset turnover by geographic area
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| United States | 0.31 | 0.38 | 0.34 | 0.36 | 0.33 | 0.25 |
| Europe | 0.54 | 0.57 | 0.44 | 0.54 | 0.48 | 0.52 |
| Canada | 0.10 | 0.14 | 0.17 | 0.16 | 0.14 | 0.15 |
| Other | 0.33 | 0.42 | 0.46 | 0.51 | 0.91 | 0.97 |
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 asset turnover ratios across the identified geographic segments exhibit divergent trends between 2016 and 2021. While European operations maintain a relatively high and stable efficiency in asset utilization, other regions show significant volatility or steady declines.
- United States
- An overall increase in asset turnover is observed from 2016 to 2020, rising from 0.25 to a peak of 0.38. This upward trajectory was interrupted in 2021, when the ratio declined to 0.31.
- Europe
- This region demonstrates the most consistent asset efficiency among the primary markets, with ratios fluctuating between 0.44 and 0.57. A peak efficiency was reached in 2020 at 0.57, followed by a slight correction to 0.54 in 2021.
- Canada
- The Canadian market consistently reports the lowest asset turnover ratios of all segments. After reaching a modest peak of 0.17 in 2019, a downward trend emerged, culminating in a low of 0.10 by June 30, 2021.
- Other Geographic Areas
- A pronounced and continuous deterioration in asset turnover is evident in this segment. Beginning as the most efficient area with a ratio of 0.97 in 2016, the turnover decreased sharply over the analyzed period, falling to 0.33 by 2021.
Comparative analysis indicates a narrowing gap in efficiency between the United States and the "Other" category, while Canada continues to lag significantly in asset productivity. The European segment remains the most stable driver of high asset turnover relative to the North American regions.
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Area Asset Turnover: United States
Automatic Data Processing Inc.; United States; area asset turnover calculation
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 13,081,700) | 12,740,100) | 12,327,600) | 11,486,400) | 10,537,400) | 9,870,000) |
| Assets | 42,137,100) | 33,891,000) | 36,508,300) | 32,221,000) | 32,401,000) | 39,194,200) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 0.31 | 0.38 | 0.34 | 0.36 | 0.33 | 0.25 |
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).
1 2021 Calculation
Area asset turnover = Revenues ÷ Assets
= 13,081,700 ÷ 42,137,100 = 0.31
Between June 30, 2016, and June 30, 2021, a consistent upward trajectory in revenues is observed, while the asset base and the resulting asset turnover ratio exhibited significant volatility. Overall, revenues grew from 9,870,000 thousand US$ to 13,081,700 thousand US$, representing a sustained expansion of the top line over the six-year period.
- Revenue Growth Trends
- Revenues demonstrated uninterrupted annual growth, increasing steadily from 2016 through 2021. The most notable period of expansion occurred between 2017 and 2019, contributing to a total increase of approximately 32.5% over the analyzed timeframe.
- Asset Base Volatility
- The asset base did not follow a linear trend. A significant contraction occurred between 2016 and 2017, where assets fell from 39,194,200 thousand US$ to 32,401,000 thousand US$. This was followed by a period of relative stability and a subsequent peak in 2021, where assets reached their highest level in the series at 42,137,100 thousand US$.
- Area Asset Turnover Analysis
- The asset turnover ratio, which measures the efficiency of asset utilization in generating revenue, fluctuated between 0.25 and 0.38. An initial improvement in efficiency is noted from 2016 to 2018, as the ratio rose from 0.25 to 0.36, driven by the combination of rising revenues and a reduced asset base. The efficiency peaked in 2020 at 0.38.
- Efficiency Decline in 2021
- A marked decline in the asset turnover ratio occurred on June 30, 2021, dropping to 0.31. This decrease is attributable to a substantial increase in assets, which grew by approximately 24% in a single year, significantly outpacing the revenue growth rate for the same period.
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Area Asset Turnover: Europe
Automatic Data Processing Inc.; Europe; area asset turnover calculation
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 1,307,900) | 1,236,300) | 1,236,800) | 1,245,900) | 1,086,000) | 1,063,700) |
| Assets | 2,425,100) | 2,162,700) | 2,807,900) | 2,325,000) | 2,252,300) | 2,064,300) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 0.54 | 0.57 | 0.44 | 0.54 | 0.48 | 0.52 |
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).
1 2021 Calculation
Area asset turnover = Revenues ÷ Assets
= 1,307,900 ÷ 2,425,100 = 0.54
The European segment demonstrates a general increase in revenue over the six-year period, accompanied by significant fluctuations in the asset base, which has directly impacted the area asset turnover ratio.
- Revenue Performance
- Revenues grew from US$ 1,063.7 million in 2016 to US$ 1,307.9 million in 2021. While the overall trajectory is positive, a period of stagnation is observed between 2019 and 2020, during which revenues remained nearly flat at approximately US$ 1,236 million.
- Asset Base Volatility
- Total assets exhibited a non-linear trend, increasing from US$ 2,064.3 million in 2016 to a peak of US$ 2,807.9 million in 2019. This peak was followed by a sharp contraction to US$ 2,162.7 million in 2020, before ascending again to US$ 2,425.1 million by 2021.
- Area Asset Turnover Analysis
- The asset turnover ratio fluctuated between a minimum of 0.44 in 2019 and a maximum of 0.57 in 2020. The low point in 2019 is strongly correlated with the peak in assets, indicating a temporary decrease in asset efficiency. The subsequent rise to 0.57 in 2020 is attributed to the significant reduction in the asset base while revenues remained stable. As of 2021, the ratio settled at 0.54, suggesting a normalization of asset utilization relative to the growth in revenue.
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Area Asset Turnover: Canada
Automatic Data Processing Inc.; Canada; area asset turnover calculation
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 337,300) | 329,800) | 326,600) | 322,100) | 291,100) | 284,100) |
| Assets | 3,360,500) | 2,435,300) | 1,950,500) | 2,009,900) | 2,018,100) | 1,949,400) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 0.10 | 0.14 | 0.17 | 0.16 | 0.14 | 0.15 |
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).
1 2021 Calculation
Area asset turnover = Revenues ÷ Assets
= 337,300 ÷ 3,360,500 = 0.10
An analysis of the Canadian operations between June 30, 2016, and June 30, 2021, reveals a divergence between revenue growth and asset accumulation, resulting in a decline in operational efficiency regarding asset utilization.
- Revenue Trends
- Revenues demonstrated a consistent upward trajectory over the six-year period, increasing from 284.1 million USD in 2016 to 337.3 million USD in 2021. This growth was steady, with a notable increase between 2017 and 2018, followed by more moderate gains in subsequent years.
- Asset Accumulation
- Total assets remained relatively stable between 2016 and 2019, fluctuating around the 2 billion USD mark. However, a significant acceleration in asset growth occurred after June 30, 2019, with assets rising to 2.44 billion USD in 2020 and reaching 3.36 billion USD by 2021. This represents a substantial increase in the capital base deployed in the region during the final two years of the period.
- Area Asset Turnover Performance
- The asset turnover ratio exhibited relative stability from 2016 to 2019, peaking at 0.17 in 2019. Following this peak, the ratio declined sharply to 0.14 in 2020 and further to 0.10 in 2021. This downward trend indicates that the growth in assets significantly outpaced the growth in revenues, leading to a diminished capacity to generate sales from the invested asset base.
The overall trend suggests that while the Canadian market continues to expand in terms of top-line revenue, the recent and rapid expansion of the asset base has negatively impacted the area asset turnover ratio, marking a period of decreasing asset productivity.
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Area Asset Turnover: Other
Automatic Data Processing Inc.; Other; area asset turnover calculation
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 278,500) | 283,600) | 284,200) | 271,400) | 465,300) | 450,000) |
| Assets | 849,800) | 676,500) | 621,000) | 532,800) | 508,600) | 462,100) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 0.33 | 0.42 | 0.46 | 0.51 | 0.91 | 0.97 |
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).
1 2021 Calculation
Area asset turnover = Revenues ÷ Assets
= 278,500 ÷ 849,800 = 0.33
The financial performance of the "Other" geographic area between June 30, 2016, and June 30, 2021, is characterized by a significant reduction in asset efficiency. While the asset base expanded steadily, revenues experienced a sharp contraction and subsequent stagnation, leading to a consistent decline in the asset turnover ratio.
- Revenue Trends
- Revenues reached a peak of US$ 465.3 million in June 2017 before experiencing a substantial decline to US$ 271.4 million by June 2018. From 2018 through June 2021, revenue levels remained relatively flat, oscillating within a narrow range between US$ 271.4 million and US$ 284.2 million.
- Asset Growth
- A consistent upward trend in total assets is observed throughout the analyzed period. Assets grew from US$ 462.1 million in June 2016 to US$ 849.8 million in June 2021, representing a steady accumulation of resources within this geographic segment.
- Area Asset Turnover Analysis
- The area asset turnover ratio decreased steadily from 0.97 in 2016 to 0.33 in 2021. The most precipitous decline occurred between 2017 and 2018, where the ratio dropped from 0.91 to 0.51. This downward trajectory reflects a diminishing capacity to generate revenue relative to the increasing investment in assets, indicating a decline in operational efficiency for this specific area.
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Revenues
Automatic Data Processing Inc., revenues by geographic area
US$ in thousands
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| United States | 13,081,700) | 12,740,100) | 12,327,600) | 11,486,400) | 10,537,400) | 9,870,000) |
| Europe | 1,307,900) | 1,236,300) | 1,236,800) | 1,245,900) | 1,086,000) | 1,063,700) |
| Canada | 337,300) | 329,800) | 326,600) | 322,100) | 291,100) | 284,100) |
| Other | 278,500) | 283,600) | 284,200) | 271,400) | 465,300) | 450,000) |
| Total | 15,005,400) | 14,589,800) | 14,175,200) | 13,325,800) | 12,379,800) | 11,667,800) |
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).
Total revenue demonstrates a consistent upward trajectory over the six-year period, increasing from $11.67 billion in 2016 to $15.01 billion in 2021. This overall growth is primarily driven by strong performance within the domestic market, which offsets volatility observed in smaller geographic segments.
- United States Market Performance
- The United States represents the dominant revenue stream, exhibiting steady growth from $9.87 billion in 2016 to $13.08 billion in 2021. This segment serves as the primary engine for total revenue expansion, maintaining a consistent increase in annual contributions throughout the period.
- International Market Trends
- European revenues grew from $1.06 billion in 2016 to $1.31 billion in 2021, though a period of stagnation was observed between 2019 and 2020. The Canadian market showed a stable and incremental increase, rising from $284.1 million to $337.3 million over the same timeframe.
- Analysis of Other Geographic Areas
- A significant contraction occurred in the "Other" category, where revenues dropped from $465.3 million in 2017 to $271.4 million in 2018. Following this decline, revenues in these regions remained relatively flat, ending the period at $278.5 million in 2021.
- Revenue Concentration and Distribution
- The revenue mix is heavily concentrated in the United States, which consistently accounts for the vast majority of total annual turnover. While international segments provide diversification, their combined impact on total growth is secondary to the performance of the domestic market.
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Assets
Automatic Data Processing Inc., assets by geographic area
US$ in thousands
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| United States | 42,137,100) | 33,891,000) | 36,508,300) | 32,221,000) | 32,401,000) | 39,194,200) |
| Europe | 2,425,100) | 2,162,700) | 2,807,900) | 2,325,000) | 2,252,300) | 2,064,300) |
| Canada | 3,360,500) | 2,435,300) | 1,950,500) | 2,009,900) | 2,018,100) | 1,949,400) |
| Other | 849,800) | 676,500) | 621,000) | 532,800) | 508,600) | 462,100) |
| Total | 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 across all geographic segments exhibited volatility between 2016 and 2021, characterized by a decline in the middle years followed by a substantial increase in the final year. Total asset value began at $43.67 billion in 2016, reached a nadir of $37.09 billion in 2018, and culminated in a period high of $48.77 billion by June 30, 2021.
- United States Asset Performance
- The United States represents the primary concentration of assets. A notable decline occurred between 2016 and 2017, with values dropping from $39.19 billion to $32.40 billion. After a period of fluctuation, assets surged in 2021 to $42.14 billion, representing the highest asset level for the region within the analyzed timeframe.
- Canadian Asset Growth
- Assets in Canada remained relatively stable between 2016 and 2019, hovering around the $2 billion mark. A growth trend emerged in 2020, with assets rising to $2.44 billion, followed by an accelerated increase to $3.36 billion by June 30, 2021.
- European Asset Trends
- European assets showed moderate growth from 2016 through 2019, peaking at $2.81 billion. A contraction was observed in 2020, where assets fell to $2.16 billion, followed by a partial recovery to $2.43 billion in 2021.
- Other Geographic Segments
- The Other category demonstrated the most consistent upward trajectory of all regions. Assets increased annually without exception, growing from $462.1 million in 2016 to $849.8 million in 2021, indicating steady expansion in smaller international markets.
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