Automatic Data Processing Inc., current enterprise value calculation

Current share price (P)	$218.18
No. shares of common stock outstanding	417,747,152
US$ in thousands
Common equity (market value)¹	91,144,074)
Add: Preferred stock, $1.00 par value; issued, none (per books)	—)
Total equity	91,144,074)
Add: Obligations under reverse repurchase agreements (per books)	23,500)
Add: Short-term debt (per books)	—)
Add: Long-term debt (per books)	2,985,000)
Total equity and debt	94,152,574)
Less: Cash and cash equivalents	2,575,200)
Less: Funds held for clients	34,905,800)
Enterprise value (EV)	56,671,574)

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

¹ Common equity (market value) = Share price × No. shares of common stock outstanding
= 218.18 × 417,747,152

Automatic Data Processing Inc., EV calculation

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Share price^1, 2	$212.00	$134.77	$167.73	$134.25	$111.39	$89.67
No. shares of common stock outstanding¹	423,080,556	429,965,405	433,942,837	438,082,756	444,374,752	456,176,951
US$ in thousands
Common equity (market value)³	89,693,078)	57,946,438)	72,785,232)	58,812,610)	49,498,904)	40,905,387)
Add: Preferred stock, $1.00 par value; issued, none (book value)	—)	—)	—)	—)	—)	—)
Total equity	89,693,078)	57,946,438)	72,785,232)	58,812,610)	49,498,904)	40,905,387)
Add: Obligations under reverse repurchase agreements (book value)	23,500)	13,600)	262,000)	—)	—)	—)
Add: Short-term debt (book value)	—)	1,001,800)	—)	—)	—)	—)
Add: Long-term debt (book value)	2,985,000)	1,002,800)	2,002,200)	2,002,400)	2,002,400)	2,007,700)
Total equity and debt	92,701,578)	59,964,638)	75,049,432)	60,815,010)	51,501,304)	42,913,087)
Less: Cash and cash equivalents	2,575,200)	1,908,500)	1,949,200)	2,170,000)	2,780,400)	3,191,100)
Less: Funds held for clients	34,905,800)	26,708,100)	29,434,200)	27,137,800)	27,291,500)	33,841,200)
Enterprise value (EV)	55,220,578)	31,348,038)	43,666,032)	31,507,210)	21,429,404)	5,880,787)

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 Data adjusted for splits and stock dividends.

² Closing price as at the filing date of Automatic Data Processing Inc. Annual Report.

³ 2021 Calculation
Common equity (market value) = Share price × No. shares of common stock outstanding
= 212.00 × 423,080,556

The financial data reveals several key trends over the six-year period ending June 30, 2021.

Common Equity (Market Value) and Total Equity: Both common equity and total equity exhibit a generally upward trajectory, indicating growth in shareholder value and total ownership interest in the company. The value increased substantially from approximately 40.9 billion USD in mid-2016 to nearly 89.7 billion USD by mid-2021. There was a marked rise each year except for a decline observed in 2020, where equity decreased to about 57.9 billion USD from the prior year’s peak of 72.8 billion USD. This dip could reflect market or operational challenges during that period. The recovery in 2021 was robust, reaching the highest value in the period under review.
Total Equity and Debt: Total equity and debt, representing the company's combined financing sources, also followed a pattern similar to total equity. Starting near 42.9 billion USD in 2016, it rose steadily to peak at approximately 75.0 billion USD in 2019, decreased to just under 60.0 billion USD in 2020, and then surged to around 92.7 billion USD in 2021. This suggests that both equity and liabilities contributed to capital structure growth, with increased leverage or debt utilization in recent years, particularly noticeable in 2021.
Enterprise Value (EV): Enterprise value experienced significant fluctuation and overall growth from roughly 5.9 billion USD in 2016 to above 55.2 billion USD in 2021. The EV more than tripled between 2017 and 2019 but dipped again in 2020, falling back to approximately 31.3 billion USD. The 2021 figure showed a strong recovery, nearly doubling from the prior year. This volatility in EV suggests market revaluation dynamics affecting overall company valuation, possibly tied to external economic conditions or company-specific developments impacting perceived worth and investor sentiment.

In summary, the data depicts a pattern of substantial growth in equity and enterprise value over the medium term, interrupted by a downturn around 2020 likely due to macroeconomic disruptions. The subsequent rapid recovery in 2021 highlights resilience and possibly improved operational or market conditions. The trends imply an increasing scale of operations and/or improved market positioning complemented by varying capital structure adjustments over the years.

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Automatic Data Processing Inc. (NASDAQ:ADP)

Enterprise Value (EV)

Current Enterprise Value (EV)

Historical Enterprise Value (EV)