Automatic Data Processing Inc. (ADP)

Price to FCFE (P/FCFE)

Difficulty: Intermediate

Automatic Data Processing Inc., FCFE calculation

USD $ in thousands

	12 months ended	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Net earnings
	Net noncash charges
	Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses
	Net cash flows provided by operating activities
	Capital expenditures
	Additions to intangibles
	Proceeds from debt issuance
	Payments of debt
	Net proceeds (repayments) from reverse repurchase agreements
	Net proceeds from issuance (repayments) of commercial paper
	Free cash flow to equity (FCFE)

Item	Description	The company
FCFE	Free cash flow to equity is the cash flow available to Automatic Data Processing Inc.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.	Automatic Data Processing Inc.’s FCFE declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

Automatic Data Processing Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in thousands)
FCFE per share
Current share price (P)
Ratio
P/FCFE
Benchmarks
P/FCFE, Competitors
Accenture PLC
P/FCFE, Sector
Support Services
P/FCFE, Industry
Industrials

If company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.

Otherwise, if company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Automatic Data Processing Inc., historical P/FCFE calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	No. shares of common stock outstanding¹
	Selected Financial Data (USD $)
	Free cash flow to equity (FCFE) (in thousands)²
	FCFE per share⁴
	Share price^1, 3
	Ratio
	P/FCFE⁵
	Benchmarks
	P/FCFE, Competitors
	Accenture PLC
	P/FCFE, Sector
	Support Services
	P/FCFE, Industry
	Industrials

¹ Data adjusted for splits and stock dividends.

³ Close price on the filing date of Automatic Data Processing Inc.’s Annual Report.

2018 Calculations

⁴ FCFE per share = FCFE ÷ No. shares of common stock outstanding
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⁵ P/FCFE = Share price ÷ FCFE per share
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Ratio	Description	The company
P/FCFE	Price to free cash flow to equity is cash valuation indicator of stockholders’ equity.	Automatic Data Processing Inc.’s P/FCFE ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

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

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