Profitability ratios measure the company ability to generate profitable sales from its resources (assets).

Profitability Ratios (Summary)
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Equity (ROE)
Return on Assets (ROA)

Automatic Data Processing Inc., profitability ratios

		Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
	Return on Sales
	Gross profit margin
	Operating profit margin
	Net profit margin
	Return on Investment
	Return on equity (ROE)
	Return on assets (ROA)

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).

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. 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. 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. 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. 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. ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

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

		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
	Revenues
	Profitability Ratio
	Gross profit margin¹
	Benchmarks
	Gross Profit Margin, Competitors²
	Accenture PLC
	Adobe Inc.
	Fidelity National Information Services Inc.
	International Business Machines Corp.
	Intuit Inc.
	Microsoft Corp.
	Oracle Corp.
	PayPal Holdings Inc.
	salesforce.com inc.
	ServiceNow Inc.

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
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =

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. gross profit margin ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

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

		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
	Revenues
	Profitability Ratio
	Operating profit margin¹
	Benchmarks
	Operating Profit Margin, Competitors²
	Accenture PLC
	Adobe Inc.
	Fidelity National Information Services Inc.
	International Business Machines Corp.
	Intuit Inc.
	Mastercard Inc.
	Microsoft Corp.
	Oracle Corp.
	PayPal Holdings Inc.
	salesforce.com inc.
	ServiceNow Inc.
	Visa Inc.
	Operating Profit Margin, Sector
	Software & Services
	Operating Profit Margin, Industry
	Information Technology

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
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × ÷ =

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. operating profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

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

		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
	Revenues
	Profitability Ratio
	Net profit margin¹
	Benchmarks
	Net Profit Margin, Competitors²
	Accenture PLC
	Adobe Inc.
	Fidelity National Information Services Inc.
	International Business Machines Corp.
	Intuit Inc.
	Mastercard Inc.
	Microsoft Corp.
	Oracle Corp.
	PayPal Holdings Inc.
	salesforce.com inc.
	ServiceNow Inc.
	Visa Inc.
	Net Profit Margin, Sector
	Software & Services
	Net Profit Margin, Industry
	Information Technology

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
Net profit margin = 100 × Net earnings ÷ Revenues
= 100 × ÷ =

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. net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

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

		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
	Stockholders’ equity
	Profitability Ratio
	ROE¹
	Benchmarks
	ROE, Competitors²
	Accenture PLC
	Adobe Inc.
	Fidelity National Information Services Inc.
	International Business Machines Corp.
	Intuit Inc.
	Mastercard Inc.
	Microsoft Corp.
	Oracle Corp.
	PayPal Holdings Inc.
	salesforce.com inc.
	ServiceNow Inc.
	Visa Inc.
	ROE, Sector
	Software & Services
	ROE, Industry
	Information Technology

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
ROE = 100 × Net earnings ÷ Stockholders’ equity
= 100 × ÷ =

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. ROE improved from 2019 to 2020 and from 2020 to 2021.

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

		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
	Total assets
	Profitability Ratio
	ROA¹
	Benchmarks
	ROA, Competitors²
	Accenture PLC
	Adobe Inc.
	Fidelity National Information Services Inc.
	International Business Machines Corp.
	Intuit Inc.
	Mastercard Inc.
	Microsoft Corp.
	Oracle Corp.
	PayPal Holdings Inc.
	salesforce.com inc.
	ServiceNow Inc.
	Visa Inc.
	ROA, Sector
	Software & Services
	ROA, Industry
	Information Technology

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
ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =

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. ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

	Automatic Data Processing Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

Automatic Data Processing Inc. (NASDAQ:ADP)

Analysis of Profitability Ratios

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Profitability Ratios (Summary)

Gross Profit Margin

Operating Profit Margin

Net Profit Margin

Return on Equity (ROE)

Return on Assets (ROA)