Stock Analysis on Net
Stock Analysis on Net

Automatic Data Processing Inc. (NASDAQ:ADP)

Analysis of Profitability Ratios

Microsoft Excel LibreOffice Calc

Profitability Ratios (Summary)

Automatic Data Processing Inc., profitability ratios

Microsoft Excel LibreOffice Calc
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Return on Sales
Gross profit margin 42.42% 42.12% 42.95% 41.15% 41.28% 41.37%
Operating profit margin 22.16% 21.53% 21.34% 18.85% 18.80% 18.77%
Net profit margin 17.32% 16.91% 16.17% 12.16% 14.00% 12.79%
Return on Investment
Return on equity (ROE) 45.83% 42.88% 42.46% 46.85% 43.59% 33.30%
Return on assets (ROA) 5.33% 6.30% 5.47% 4.37% 4.66% 3.42%

Based on: 10-K (filing date: 2021-08-04), 10-K (filing date: 2020-08-05), 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).

Profitability 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 ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Automatic Data Processing Inc.’s operating profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Automatic Data Processing Inc.’s net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Automatic Data Processing Inc.’s ROE improved from 2019 to 2020 and from 2020 to 2021.
ROA A profitability ratio calculated as net income divided by total assets. Automatic Data Processing Inc.’s ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Gross Profit Margin

Automatic Data Processing Inc., gross profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Gross profit 6,365,100  6,144,700  6,088,600  5,483,200  5,110,000  4,827,500 
Revenues 15,005,400  14,589,800  14,175,200  13,325,800  12,379,800  11,667,800 
Profitability Ratio
Gross profit margin1 42.42% 42.12% 42.95% 41.15% 41.28% 41.37%
Benchmarks
Gross Profit Margin, Competitors2
Accenture PLC 32.38% 31.53% 30.81% 29.91% 30.00% 29.53%
Adobe Inc. 86.62% 85.03% 86.77% 86.16% 86.00%
Autodesk Inc. 91.11% 90.08% 88.87% 85.25% 83.17% 85.20%
Fidelity National Information Services Inc. 33.49% 36.03% 33.88% 32.25% 32.55%
Fiserv Inc. 47.40% 47.88% 47.30% 46.91% 46.25%
International Business Machines Corp. 48.32% 47.30% 46.41% 45.78% 47.92%
Intuit Inc. 82.53% 82.05% 82.80% 83.62% 84.37% 83.98%
Microsoft Corp. 68.93% 67.78% 65.90% 65.25% 61.91% 61.58%
Oracle Corp. 80.59% 79.68% 79.76% 79.71% 80.20% 79.81%
PayPal Holdings Inc. 46.62% 44.94% 46.53% 48.87% 47.42%
salesforce.com inc. 74.41% 75.23% 74.02% 73.54% 73.38% 75.18%
ServiceNow Inc. 78.16% 76.98% 76.13% 74.15% 71.33%

Based on: 10-K (filing date: 2021-08-04), 10-K (filing date: 2020-08-05), 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).

1 2021 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 6,365,100 ÷ 15,005,400 = 42.42%

2 Click competitor name to see calculations.

Profitability 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 ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

Operating Profit Margin

Automatic Data Processing Inc., operating profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Operating income 3,324,600  3,141,700  3,024,400  2,511,700  2,326,800  2,190,500 
Revenues 15,005,400  14,589,800  14,175,200  13,325,800  12,379,800  11,667,800 
Profitability Ratio
Operating profit margin1 22.16% 21.53% 21.34% 18.85% 18.80% 18.77%
Benchmarks
Operating Profit Margin, Competitors2
Accenture PLC 15.08% 14.69% 14.59% 14.04% 12.60% 13.82%
Adobe Inc. 32.93% 29.25% 31.45% 29.69% 25.51%
Autodesk Inc. 16.60% 10.48% -0.97% -24.75% -24.60% 0.05%
Fidelity National Information Services Inc. 4.40% 9.38% 17.31% 16.35% 14.05%
Fiserv Inc. 12.47% 15.79% 30.10% 26.90% 26.25%
International Business Machines Corp. 9.22% 13.67% 16.61% 14.91% 16.40%
Intuit Inc. 25.95% 28.34% 27.33% 25.10% 26.95% 26.46%
Mastercard Inc. 52.81% 57.24% 48.71% 52.99% 53.46%
Microsoft Corp. 41.59% 37.03% 34.14% 31.77% 24.82% 23.65%
Oracle Corp. 37.58% 35.57% 34.26% 34.34% 33.69% 34.02%
PayPal Holdings Inc. 15.33% 15.30% 14.20% 16.24% 14.63%
salesforce.com inc. 2.14% 1.74% 4.03% 2.25% 0.77% 1.72%
ServiceNow Inc. 4.40% 1.22% -1.63% -5.25% -30.41%
Visa Inc. 65.56% 64.46% 65.29% 62.86% 66.15% 52.27%
Operating Profit Margin, Sector
Software & Services 26.54% 26.97% 26.30% 23.78% 22.81%
Operating Profit Margin, Industry
Information Technology 25.78% 26.62% 27.30% 24.93% 23.63%

Based on: 10-K (filing date: 2021-08-04), 10-K (filing date: 2020-08-05), 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).

1 2021 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × 3,324,600 ÷ 15,005,400 = 22.16%

2 Click competitor name to see calculations.

Profitability 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 ratio improved from 2019 to 2020 and from 2020 to 2021.

Net Profit Margin

Automatic Data Processing Inc., net profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Net earnings 2,598,500  2,466,500  2,292,800  1,620,800  1,733,400  1,492,500 
Revenues 15,005,400  14,589,800  14,175,200  13,325,800  12,379,800  11,667,800 
Profitability Ratio
Net profit margin1 17.32% 16.91% 16.17% 12.16% 14.00% 12.79%
Benchmarks
Net Profit Margin, Competitors2
Accenture PLC 11.69% 11.52% 11.06% 9.76% 9.37% 11.82%
Adobe Inc. 40.88% 26.42% 28.69% 23.20% 19.96%
Autodesk Inc. 31.88% 6.55% -3.14% -27.56% -28.66% -13.20%
Fidelity National Information Services Inc. 1.26% 2.88% 10.04% 14.46% 6.15%
Fiserv Inc. 6.45% 8.77% 20.38% 21.88% 16.89%
International Business Machines Corp. 7.59% 12.22% 10.97% 7.27% 14.86%
Intuit Inc. 21.41% 23.78% 22.95% 20.31% 18.76% 20.86%
Mastercard Inc. 41.90% 48.08% 39.19% 31.33% 37.67%
Microsoft Corp. 36.45% 30.96% 31.18% 15.02% 23.57% 19.69%
Oracle Corp. 33.96% 25.94% 28.05% 9.60% 24.74% 24.03%
PayPal Holdings Inc. 19.59% 13.84% 13.31% 13.71% 12.92%
salesforce.com inc. 19.16% 0.74% 8.36% 1.22% 2.14% -0.71%
ServiceNow Inc. 2.62% 18.11% -1.02% -7.71% -32.49%
Visa Inc. 51.07% 49.74% 52.57% 49.98% 36.49% 39.72%
Net Profit Margin, Sector
Software & Services 21.91% 23.32% 15.36% 17.24% 17.88%
Net Profit Margin, Industry
Information Technology 21.95% 22.94% 19.47% 18.48% 18.28%

Based on: 10-K (filing date: 2021-08-04), 10-K (filing date: 2020-08-05), 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).

1 2021 Calculation
Net profit margin = 100 × Net earnings ÷ Revenues
= 100 × 2,598,500 ÷ 15,005,400 = 17.32%

2 Click competitor name to see calculations.

Profitability 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 ratio improved from 2019 to 2020 and from 2020 to 2021.

Return on Equity (ROE)

Automatic Data Processing Inc., ROE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Net earnings 2,598,500  2,466,500  2,292,800  1,620,800  1,733,400  1,492,500 
Stockholders’ equity 5,670,100  5,752,200  5,399,900  3,459,600  3,977,000  4,481,600 
Profitability Ratio
ROE1 45.83% 42.88% 42.46% 46.85% 43.59% 33.30%
Benchmarks
ROE, Competitors2
Accenture PLC 30.25% 30.05% 33.17% 39.17% 38.50% 54.42%
Adobe Inc. 39.66% 28.03% 27.67% 20.02% 15.74%
Autodesk Inc. 125.14% -79.35% -20.41%
Fidelity National Information Services Inc. 0.32% 0.60% 8.28% 12.17% 5.83%
Fiserv Inc. 2.96% 2.71% 51.77% 45.62% 36.60%
International Business Machines Corp. 27.14% 45.25% 51.96% 32.70% 65.07%
Intuit Inc. 20.89% 35.76% 41.53% 51.44% 71.71% 84.32%
Mastercard Inc. 100.31% 137.76% 108.60% 71.60% 71.76%
Microsoft Corp. 43.15% 37.43% 38.35% 20.03% 29.29% 23.33%
Oracle Corp. 262.43% 83.94% 50.87% 8.37% 17.33% 18.82%
PayPal Holdings Inc. 20.99% 14.56% 13.37% 11.22% 9.52%
salesforce.com inc. 9.81% 0.37% 7.11% 1.36% 2.40% -0.95%
ServiceNow Inc. 4.18% 29.45% -2.40% -25.53% -116.76%
Visa Inc. 32.75% 30.01% 34.83% 30.29% 20.45% 18.20%
ROE, Sector
Software & Services 26.20% 28.78% 23.51% 24.08% 24.90%
ROE, Industry
Information Technology 32.11% 33.34% 31.07% 23.72% 23.14%

Based on: 10-K (filing date: 2021-08-04), 10-K (filing date: 2020-08-05), 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).

1 2021 Calculation
ROE = 100 × Net earnings ÷ Stockholders’ equity
= 100 × 2,598,500 ÷ 5,670,100 = 45.83%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Automatic Data Processing Inc.’s ROE improved from 2019 to 2020 and from 2020 to 2021.

Return on Assets (ROA)

Automatic Data Processing Inc., ROA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Net earnings 2,598,500  2,466,500  2,292,800  1,620,800  1,733,400  1,492,500 
Total assets 48,772,500  39,165,500  41,887,700  37,088,700  37,180,000  43,670,000 
Profitability Ratio
ROA1 5.33% 6.30% 5.47% 4.37% 4.66% 3.42%
Benchmarks
ROA, Competitors2
Accenture PLC 13.68% 13.78% 16.04% 16.61% 15.18% 19.95%
Adobe Inc. 21.66% 14.22% 13.80% 11.65% 9.20%
Autodesk Inc. 16.60% 3.47% -1.71% -13.78% -12.13% -5.99%
Fidelity National Information Services Inc. 0.19% 0.36% 3.56% 5.38% 2.18%
Fiserv Inc. 1.28% 1.15% 10.54% 12.11% 9.55%
International Business Machines Corp. 3.58% 6.20% 7.07% 4.59% 10.11%
Intuit Inc. 13.29% 16.70% 24.78% 23.39% 23.87% 23.04%
Mastercard Inc. 19.09% 27.77% 23.57% 18.36% 21.73%
Microsoft Corp. 18.36% 14.70% 13.69% 6.40% 8.80% 8.67%
Oracle Corp. 10.48% 8.78% 10.20% 2.79% 6.92% 7.93%
PayPal Holdings Inc. 5.97% 4.79% 4.75% 4.40% 4.23%
salesforce.com inc. 6.14% 0.23% 3.61% 0.61% 1.02% -0.37%
ServiceNow Inc. 1.36% 10.41% -0.69% -4.39% -22.22%
Visa Inc. 14.85% 13.43% 16.65% 14.88% 9.85% 9.36%
ROA, Sector
Software & Services 8.90% 9.66% 7.24% 7.60% 8.49%
ROA, Industry
Information Technology 11.21% 11.86% 10.97% 9.02% 9.47%

Based on: 10-K (filing date: 2021-08-04), 10-K (filing date: 2020-08-05), 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).

1 2021 Calculation
ROA = 100 × Net earnings ÷ Total assets
= 100 × 2,598,500 ÷ 48,772,500 = 5.33%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Automatic Data Processing Inc.’s ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.