Balance Sheet: Assets

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Assets are resources controlled by the company as a result of past events and from which future economic benefits are expected to flow to the entity.

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Paycom Software Inc., consolidated balance sheet: assets

US$ in thousands

		Dec 31, 2022		Dec 31, 2021		Dec 31, 2020		Dec 31, 2019		Dec 31, 2018
	Cash and cash equivalents
	Accounts receivable
	Prepaid expenses
	Inventory
	Income tax receivable
	Deferred contract costs
	Current assets before funds held for clients
	Funds held for clients
	Current assets
	Property and equipment, net
	Intangible assets, net
	Goodwill
	Long-term deferred contract costs
	Other assets
	Noncurrent assets
	Total assets

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The analysis of the annual financial data reveals several notable trends and developments over the observed periods.

Liquidity Position: Cash and cash equivalents have shown a significant and consistent increase year over year, rising from 45,718 thousand USD in 2018 to 400,730 thousand USD in 2022. This growth reflects a strengthening liquidity position, providing ample short-term financial flexibility.
Accounts Receivable and Working Capital Components: Accounts receivable experienced steady growth, particularly notable in 2022 where it more than doubled to 22,843 thousand USD compared to the previous year. Prepaid expenses and inventory also increased consistently, with prepaid expenses almost quadrupling across the period, indicating increasing prepaid costs and potential expansion in operations. Inventory levels remained relatively stable, with modest growth, suggesting controlled inventory management.
Tax and Deferred Costs: Income tax receivable displayed volatility, peaking significantly in 2021 at 16,413 thousand USD before declining in 2022. Deferred contract costs, both current and long-term, have exhibited strong upward trends. Current deferred contract costs nearly tripled from 35,286 thousand USD in 2018 to 96,378 thousand USD in 2022, while long-term deferred contract costs more than doubled from 225,459 thousand USD to 567,974 thousand USD during the same timeframe. This suggests increasing investments in contract-related assets and possibly a growing contract backlog.
Current Assets and Funds Held for Clients: Current assets before funds held for clients demonstrated robust growth, increasing from 96,835 thousand USD to 561,197 thousand USD by 2022. Funds held for clients, a significant component, exhibited substantial fluctuations but overall increased markedly from 967,787 thousand USD in 2018 to 2,202,975 thousand USD in 2022, reflecting growth in client-related transactions or obligations. Consequently, total current assets increased substantially, more than doubling from 1,064,622 thousand USD to 2,764,172 thousand USD.
Noncurrent Assets: Property and equipment (net) consistently increased, reflecting ongoing capital expenditures or asset acquisitions. This account rose from 176,962 thousand USD to 402,448 thousand USD over the period. Intangible assets showed unusual movement, declining sharply in 2020 but then surging to over 54,000 thousand USD by the end of 2021 and stabilizing in 2022. Goodwill remained constant throughout. Long-term deferred contract costs and other assets also increased significantly, indicating sustained investment in long-term resources.
Total Asset Base: Total assets increased substantially over the five-year period, from approximately 1.52 billion USD in 2018 to nearly 3.9 billion USD in 2022. This growth was driven primarily by increases in current assets, funds held for clients, and noncurrent assets, indicating expansion in both operational scale and asset holdings.

Overall, the financial data points to strong growth in asset size, improved liquidity, and heightened investment in deferred costs and fixed assets. The expansions in accounts receivable, prepaid expenses, and deferred contract costs align with possible business growth and increased operational activities. The significant rise in funds held for clients suggests an enhanced role as a fiduciary or agent managing client funds, contributing to the overall increase in total assets.

Assets: Selected Items

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Current Assets: Selected Items