.Profitability Analysis
Difficulty: Beginner
Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).
Ratios (Summary)
Automatic Data Processing Inc., profitability ratios
| Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | ||
|---|---|---|---|---|---|---|---|
| Return on Sales | |||||||
| | Gross profit margin | % | % | % | % | % | % |
| | Operating profit margin | % | % | % | % | % | % |
| | Net profit margin | % | % | % | % | % | % |
| Return on Investment | |||||||
| | Return on equity (ROE) | % | % | % | % | % | % |
| | Return on assets (ROA) | % | % | % | % | % | % |
Source: Based on data from Automatic Data Processing Inc. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Automatic Data Processing Inc.'s gross profit margin improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Automatic Data Processing Inc.'s operating profit margin improved from 2015 to 2016 and from 2016 to 2017. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Automatic Data Processing Inc.'s net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Automatic Data Processing Inc.'s ROE improved from 2015 to 2016 and from 2016 to 2017. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Automatic Data Processing Inc.'s ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Gross Profit Margin
Automatic Data Processing Inc., gross profit margin calculation
| Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | |||||||
| | Gross profit from continuing operations | ||||||
| | Revenues | ||||||
| Ratio | |||||||
| | Gross profit margin1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors | |||||||
| Accenture PLC | % | % | % | % | % | % | |
Source: Based on data from Automatic Data Processing Inc. Annual Reports
2017 Calculations
1 Gross profit margin = 100 × Gross profit from continuing operations ÷ Revenues
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Automatic Data Processing Inc.'s gross profit margin improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
Operating Profit Margin
Automatic Data Processing Inc., operating profit margin calculation, comparison to benchmarks
| Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | |||||||
| | Operating income | ||||||
| | Revenues | ||||||
| Ratio | |||||||
| | Operating profit margin1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors | |||||||
| Accenture PLC | % | % | % | % | % | % | |
| Operating Profit Margin, Sector | |||||||
| Support Services | % | % | % | % | % | % | |
| Operating Profit Margin, Industry | |||||||
| Industrials | % | % | % | % | % | % | |
Source: Based on data from Automatic Data Processing Inc. Annual Reports
2017 Calculations
1 Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Automatic Data Processing Inc.'s operating profit margin improved from 2015 to 2016 and from 2016 to 2017. |
Net Profit Margin
Automatic Data Processing Inc., net profit margin calculation, comparison to benchmarks
| Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | |||||||
| | Net earnings | ||||||
| | Revenues | ||||||
| Ratio | |||||||
| | Net profit margin1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| Net Profit Margin, Competitors | |||||||
| Accenture PLC | % | % | % | % | % | % | |
| Net Profit Margin, Sector | |||||||
| Support Services | % | % | % | % | % | % | |
| Net Profit Margin, Industry | |||||||
| Industrials | % | % | % | % | % | % | |
Source: Based on data from Automatic Data Processing Inc. Annual Reports
2017 Calculations
1 Net profit margin = 100 × Net earnings ÷ Revenues
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Automatic Data Processing Inc.'s net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Return on Equity (ROE)
Automatic Data Processing Inc., ROE calculation, comparison to benchmarks
| Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | |||||||
| | Net earnings | ||||||
| | Stockholders' equity | ||||||
| Ratio | |||||||
| | ROE1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| ROE, Competitors | |||||||
| Accenture PLC | % | % | % | % | % | % | |
| ROE, Sector | |||||||
| Support Services | % | % | % | % | % | % | |
| ROE, Industry | |||||||
| Industrials | % | % | % | % | % | % | |
Source: Based on data from Automatic Data Processing Inc. Annual Reports
2017 Calculations
1 ROE = 100 × Net earnings ÷ Stockholders' equity
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Automatic Data Processing Inc.'s ROE improved from 2015 to 2016 and from 2016 to 2017. |
Return on Assets (ROA)
Automatic Data Processing Inc., ROA calculation, comparison to benchmarks
| Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in thousands) | |||||||
| | Net earnings | ||||||
| | Total assets | ||||||
| Ratio | |||||||
| | ROA1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| ROA, Competitors | |||||||
| Accenture PLC | % | % | % | % | % | % | |
| ROA, Sector | |||||||
| Support Services | % | % | % | % | % | % | |
| ROA, Industry | |||||||
| Industrials | % | % | % | % | % | % | |
Source: Based on data from Automatic Data Processing Inc. Annual Reports
2017 Calculations
1 ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Automatic Data Processing Inc.'s ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
