Balance Sheet: Liabilities and Stockholders’ Equity

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.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Paycom Software Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Accounts payable	16,054)	5,772)	6,787)	5,051)	6,288)
Accrued commissions and bonuses	28,439)	22,357)	13,703)	12,343)	10,671)
Accrued payroll and vacation	45,023)	34,259)	24,529)	14,870)	10,741)
Deferred revenue	19,825)	16,277)	13,567)	11,105)	8,980)
Current portion of long-term debt	—)	1,775)	1,775)	1,775)	1,775)
Accrued expenses and other current liabilities	59,990)	63,397)	44,175)	45,600)	22,440)
Current liabilities before client funds obligation	169,331)	143,837)	104,536)	90,744)	60,895)
Client funds obligation	2,207,706)	1,846,573)	1,613,494)	1,662,778)	967,787)
Current liabilities	2,377,037)	1,990,410)	1,718,030)	1,753,522)	1,028,682)
Deferred income tax liabilities, net	141,033)	145,504)	112,598)	91,217)	70,206)
Long-term deferred revenue	97,591)	85,149)	73,259)	65,139)	55,671)
Net long-term debt, less current portion	29,000)	27,380)	29,119)	30,858)	32,614)
Other long-term liabilities	75,245)	72,988)	19,263)	19,553)	—)
Long-term liabilities	342,869)	331,021)	234,239)	206,767)	158,491)
Total liabilities	2,719,906)	2,321,431)	1,952,269)	1,960,289)	1,187,173)
Common stock, $0.01 par value	625)	623)	618)	613)	607)
Additional paid-in capital	576,622)	465,594)	357,908)	257,501)	203,680)
Retained earnings	1,196,968)	915,579)	719,619)	576,166)	395,590)
Accumulated other comprehensive loss	(3,703)	—)	—)	—)	—)
Treasury stock, at cost	(587,905)	(488,082)	(422,502)	(307,652)	(265,124)
Stockholders’ equity	1,182,607)	893,714)	655,643)	526,628)	334,753)
Total liabilities and stockholders’ equity	3,902,513)	3,215,145)	2,607,912)	2,486,917)	1,521,926)

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 financial data illustrate a consistent upward trend in multiple liability accounts over the five-year period ending December 31, 2022. Current liabilities before client funds obligation increased significantly from $60,895 thousand in 2018 to $169,331 thousand in 2022. This growth is driven primarily by notable rises in accrued commissions and bonuses, accrued payroll and vacation, and accrued expenses and other current liabilities. For instance, accrued payroll and vacation more than quadrupled, rising from $10,741 thousand to $45,023 thousand during this period. Similarly, accrued commissions and bonuses increased substantially by approximately 167%, moving from $10,671 thousand to $28,439 thousand.

Client funds obligation, a major component of current liabilities, also showed a significant increase from $967,787 thousand in 2018 to $2,207,706 thousand in 2022, reflecting heightened client activity or funds held on behalf of clients. Overall current liabilities increased by approximately 131%, from roughly $1.03 billion to $2.38 billion.

Long-term liabilities exhibited increasing trends as well, rising from $158,491 thousand in 2018 to $342,869 thousand in 2022. A noteworthy change within this category is the emergence of other long-term liabilities, which were absent in 2018 but progressed to $75,245 thousand by 2022. Deferred income tax liabilities grew steadily, increasing from $70,206 thousand to a peak of $145,504 thousand in 2021 before slightly declining to $141,033 thousand in 2022. Net long-term debt, less current portion, displayed a modest decline between 2018 and 2021 but showed a small increase to $29,000 thousand in 2022.

Total liabilities increased substantially from approximately $1.19 billion in 2018 to around $2.72 billion in 2022, reflecting the company's expanded obligations overall.

On the equity side, the company exhibited robust growth. Additional paid-in capital saw a substantial increase from $203,680 thousand to $576,622 thousand, indicating a significant infusion of capital or stock-based compensation during the period. Retained earnings displayed a marked upward trajectory, climbing from $395,590 thousand in 2018 to nearly $1.20 billion in 2022, which signals sustained profitability and reinvestment of earnings.

Treasury stock at cost increased steadily in absolute value, signaling ongoing repurchase of shares, rising from a negative $265,124 thousand in 2018 to negative $587,905 thousand in 2022. Common stock par value remained nearly constant, with only nominal increases over the years. Accumulated other comprehensive loss first appeared in 2022 at a relatively minor level of negative $3,703 thousand.

Stockholders’ equity increased from $334,753 thousand in 2018 to $1,182,607 thousand in 2022, representing significant growth in the company's net worth. The substantial growth in equity combined with the growth in liabilities contributed to a doubling of total liabilities and stockholders’ equity, from $1.52 billion in 2018 to $3.90 billion in 2022.

Liabilities: Marked increase in both current and long-term liabilities, particularly client funds obligations and accrued expenses, reflecting expanded operational scale and financial obligations.
Equity: Strong equity growth driven by increased retained earnings and additional paid-in capital, partially offset by increased treasury stock holdings.
Overall financial structure: The company's total financing (liabilities plus equity) nearly doubled over five years, indicating expansion and possibly increased leverage, though equity growth suggests support from retained earnings and capital contributions.

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Paycom Software Inc. (NYSE:PAYC)

Balance Sheet: Liabilities and Stockholders’ Equity