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Analysis of Solvency Ratios
Beginner level
Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.
Solvency Ratios (Summary)
Automatic Data Processing Inc., solvency ratios
Based on: 10-K (filing date: 2019-08-09), 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).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Automatic Data Processing Inc.’s debt to equity ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Automatic Data Processing Inc.’s debt to capital ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Automatic Data Processing Inc.’s debt to assets ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Automatic Data Processing Inc.’s financial leverage ratio increased from 2017 to 2018 but then decreased significantly from 2018 to 2019. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Automatic Data Processing Inc.’s interest coverage ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Automatic Data Processing Inc.’s fixed charge coverage ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level. |
Debt to Equity
Automatic Data Processing Inc., debt to equity calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Obligations under reverse repurchase agreements | |||||||
| Obligations under commercial paper borrowings | |||||||
| Long-term debt | |||||||
| Total debt | |||||||
| Stockholders’ equity | |||||||
| Solvency Ratio | |||||||
| Debt to equity1 | |||||||
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Accenture PLC | |||||||
| Debt to Equity, Sector | |||||||
| Support Services | |||||||
| Debt to Equity, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (filing date: 2019-08-09), 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).
1 2019 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Automatic Data Processing Inc.’s debt to equity ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
Debt to Capital
Automatic Data Processing Inc., debt to capital calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Obligations under reverse repurchase agreements | |||||||
| Obligations under commercial paper borrowings | |||||||
| Long-term debt | |||||||
| Total debt | |||||||
| Stockholders’ equity | |||||||
| Total capital | |||||||
| Solvency Ratio | |||||||
| Debt to capital1 | |||||||
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Accenture PLC | |||||||
| Debt to Capital, Sector | |||||||
| Support Services | |||||||
| Debt to Capital, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (filing date: 2019-08-09), 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).
1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Automatic Data Processing Inc.’s debt to capital ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
Debt to Assets
Automatic Data Processing Inc., debt to assets calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Obligations under reverse repurchase agreements | |||||||
| Obligations under commercial paper borrowings | |||||||
| Long-term debt | |||||||
| Total debt | |||||||
| Total assets | |||||||
| Solvency Ratio | |||||||
| Debt to assets1 | |||||||
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Accenture PLC | |||||||
| Debt to Assets, Sector | |||||||
| Support Services | |||||||
| Debt to Assets, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (filing date: 2019-08-09), 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).
1 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Automatic Data Processing Inc.’s debt to assets ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
Financial Leverage
Automatic Data Processing Inc., financial leverage calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Total assets | |||||||
| Stockholders’ equity | |||||||
| Solvency Ratio | |||||||
| Financial leverage1 | |||||||
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Accenture PLC | |||||||
| Financial Leverage, Sector | |||||||
| Support Services | |||||||
| Financial Leverage, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (filing date: 2019-08-09), 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).
1 2019 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Automatic Data Processing Inc.’s financial leverage ratio increased from 2017 to 2018 but then decreased significantly from 2018 to 2019. |
Interest Coverage
Automatic Data Processing Inc., interest coverage calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net earnings | |||||||
| Less: Net earnings (loss) from discontinued operations | |||||||
| Add: Income tax expense | |||||||
| Add: Interest expense | |||||||
| Earnings before interest and tax (EBIT) | |||||||
| Solvency Ratio | |||||||
| Interest coverage1 | |||||||
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Accenture PLC | |||||||
| Interest Coverage, Sector | |||||||
| Support Services | |||||||
| Interest Coverage, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (filing date: 2019-08-09), 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).
1 2019 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Automatic Data Processing Inc.’s interest coverage ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019. |
Fixed Charge Coverage
Automatic Data Processing Inc., fixed charge coverage calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net earnings | |||||||
| Less: Net earnings (loss) from discontinued operations | |||||||
| Add: Income tax expense | |||||||
| Add: Interest expense | |||||||
| Earnings before interest and tax (EBIT) | |||||||
| Add: Expense under operating lease agreements | |||||||
| Earnings before fixed charges and tax | |||||||
| Interest expense | |||||||
| Expense under operating lease agreements | |||||||
| Fixed charges | |||||||
| Solvency Ratio | |||||||
| Fixed charge coverage1 | |||||||
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Accenture PLC | |||||||
| Fixed Charge Coverage, Sector | |||||||
| Support Services | |||||||
| Fixed Charge Coverage, Industry | |||||||
| Industrials | |||||||
Based on: 10-K (filing date: 2019-08-09), 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).
1 2019 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Automatic Data Processing Inc.’s fixed charge coverage ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level. |