Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.

Automatic Data Processing Inc., debt and solvency ratios

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 2016 to 2017 and from 2017 to 2018.
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 2016 to 2017 and from 2017 to 2018.

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 2016 to 2017 and from 2017 to 2018.

Automatic Data Processing Inc., debt to equity calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in thousands)
	Obligations under reverse repurchase agreements
	Obligations under commercial paper borrowings
	Long-term debt
	Total debt
	Stockholders’ equity
	Ratio
	Debt to equity¹
	Benchmarks
	Debt to Equity, Competitors
	Accenture PLC
	Debt to Equity, Sector
	Support Services
	Debt to Equity, Industry
	Industrials

2018 Calculations

¹ Debt to equity = Total debt ÷ Stockholders’ equity
= hidden ÷ hidden = hidden

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 2016 to 2017 and from 2017 to 2018.

Automatic Data Processing Inc., debt to capital calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in thousands)
	Obligations under reverse repurchase agreements
	Obligations under commercial paper borrowings
	Long-term debt
	Total debt
	Stockholders’ equity
	Total capital
	Ratio
	Debt to capital¹
	Benchmarks
	Debt to Capital, Competitors
	Accenture PLC
	Debt to Capital, Sector
	Support Services
	Debt to Capital, Industry
	Industrials

2018 Calculations

¹ Debt to capital = Total debt ÷ Total capital
= hidden ÷ hidden = hidden

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 2016 to 2017 and from 2017 to 2018.

Automatic Data Processing Inc., interest coverage calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in thousands)
	Net earnings
	Less: Net earnings (loss) from discontinued operations
	Add: Income tax expense
	Add: Interest expense
	Earnings before interest and tax (EBIT)
	Ratio
	Interest coverage¹
	Benchmarks
	Interest Coverage, Competitors
	Accenture PLC
	Interest Coverage, Sector
	Support Services
	Interest Coverage, Industry
	Industrials

2018 Calculations

¹ Interest coverage = EBIT ÷ Interest expense
= hidden ÷ hidden = hidden

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 2016 to 2017 and 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

Automatic Data Processing Inc. (ADP)

Long-term Debt and Solvency Analysis