Automatic Data Processing Inc., FCFF calculation

US$ in thousands

12 months ended:	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Net earnings	2,598,500)	2,466,500)	2,292,800)	1,620,800)	1,733,400)	1,492,500)
Net noncash charges	1,432,200)	1,679,700)	1,601,300)	986,900)	490,800)	496,300)
Changes in operating assets and liabilities	(937,400)	(1,120,000)	(1,205,800)	(92,500)	(98,300)	(128,900)
Net cash flows provided by operating activities	3,093,300)	3,026,200)	2,688,300)	2,515,200)	2,125,900)	1,859,900)
Cash paid for interest, net of tax¹	41,046)	81,220)	97,283)	75,074)	53,499)	25,050)
Capital expenditures	(178,600)	(172,700)	(162,000)	(206,100)	(240,200)	(168,500)
Additions to intangibles	(327,300)	(443,700)	(404,500)	(264,700)	(230,400)	(217,500)
Free cash flow to the firm (FCFF)	2,628,446)	2,491,020)	2,219,083)	2,119,474)	1,708,799)	1,498,950)

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 See details »

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Automatic Data Processing Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Automatic Data Processing Inc. FCFF increased from 2019 to 2020 and from 2020 to 2021.

Automatic Data Processing Inc., interest paid, net of tax calculation

US$ in thousands

12 months ended:	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Effective Income Tax Rate (EITR)
EITR¹	22.70%	22.50%	23.70%	25.30%	31.50%	33.20%
Interest Paid, Net of Tax
Cash paid for interest, before tax	53,100)	104,800)	127,500)	100,500)	78,100)	37,500)
Less: Cash paid for interest, tax²	12,054)	23,580)	30,218)	25,427)	24,602)	12,450)
Cash paid for interest, net of tax	41,046)	81,220)	97,283)	75,074)	53,499)	25,050)

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 See details »

² 2021 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 53,100 × 22.70% = 12,054

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Automatic Data Processing Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in thousands)
Enterprise value (EV)	56,671,571)
Free cash flow to the firm (FCFF)	2,628,446)
Valuation Ratio
EV/FCFF	21.56
Benchmarks
EV/FCFF, Competitors¹
Accenture PLC	20.62
Adobe Inc.	29.59
International Business Machines Corp.	14.26
Intuit Inc.	35.55
Microsoft Corp.	50.55
Oracle Corp.	34.49
Palo Alto Networks Inc.	35.10
Salesforce Inc.	26.89
ServiceNow Inc.	52.69
Synopsys Inc.	52.36
EV/FCFF, Sector
Software & Services	41.97
EV/FCFF, Industry
Information Technology	40.46

Based on: 10-K (reporting date: 2021-06-30).

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Automatic Data Processing Inc., historical EV/FCFF 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)
Enterprise value (EV)¹	55,220,578)	31,348,038)	43,666,032)	31,507,210)	21,429,404)	5,880,787)
Free cash flow to the firm (FCFF)²	2,628,446)	2,491,020)	2,219,083)	2,119,474)	1,708,799)	1,498,950)
Valuation Ratio
EV/FCFF³	21.01	12.58	19.68	14.87	12.54	3.92
Benchmarks
EV/FCFF, Competitors⁴
Accenture PLC	24.76	17.90	18.49	17.18	—	—
Adobe Inc.	33.61	40.43	40.48	31.36	—	—
International Business Machines Corp.	13.10	9.35	12.86	—	—	—
Intuit Inc.	48.64	37.90	33.30	27.69	—	—
Microsoft Corp.	38.37	33.99	26.37	23.99	—	—
Oracle Corp.	16.36	14.99	14.03	11.11	—	—
Palo Alto Networks Inc.	32.74	26.50	20.44	22.33	—	—
Salesforce Inc.	44.91	39.63	41.21	—	—	—
ServiceNow Inc.	60.13	83.74	67.96	—	—	—
Synopsys Inc.	38.59	42.88	33.32	37.07	—	—
EV/FCFF, Sector
Software & Services	31.90	27.10	23.26	—	—	—
EV/FCFF, Industry
Information Technology	27.93	24.12	19.69	—	—	—

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 See details »

² See details »

³ 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 55,220,578 ÷ 2,628,446 = 21.01

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Automatic Data Processing Inc. EV/FCFF ratio decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Automatic Data Processing Inc. (NASDAQ:ADP)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical