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Automatic Data Processing ROA %

: 3.70% (As of Jun. 2022)
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ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Automatic Data Processing's annualized Net Income for the quarter that ended in Jun. 2022 was $2,502 Mil. Automatic Data Processing's average Total Assets over the quarter that ended in Jun. 2022 was $67,568 Mil. Therefore, Automatic Data Processing's annualized ROA % for the quarter that ended in Jun. 2022 was 3.70%.

The historical rank and industry rank for Automatic Data Processing's ROA % or its related term are showing as below:

ADP' s ROA % Range Over the Past 10 Years
Min: 3.89   Med: 4.84   Max: 6.09
Current: 4.87

During the past 13 years, Automatic Data Processing's highest ROA % was 6.09%. The lowest was 3.89%. And the median was 4.84%.

ADP's ROA % is ranked better than
58.18% of 1076 companies
in the Business Services industry
Industry Median: 3.60 vs ADP: 4.87

Automatic Data Processing ROA % Historical Data

The historical data trend for Automatic Data Processing's ROA % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Automatic Data Processing Annual Data
Trend Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22
ROA %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.96 5.68 6.09 5.91 5.27

Automatic Data Processing Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
ROA % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.17 5.15 4.66 5.66 3.70

Competitive Comparison

For the Staffing & Employment Services subindustry, Automatic Data Processing's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Automatic Data Processing ROA % Distribution

For the Business Services industry and Industrials sector, Automatic Data Processing's ROA % distribution charts can be found below:

* The bar in red indicates where Automatic Data Processing's ROA % falls into.



Automatic Data Processing ROA % Calculation

Automatic Data Processing's annualized ROA % for the fiscal year that ended in Jun. 2022 is calculated as:

ROA %=Net Income (A: Jun. 2022 )/( (Total Assets (A: Jun. 2021 )+Total Assets (A: Jun. 2022 ))/ count )
=2948.9/( (48772.5+63068.2)/ 2 )
=2948.9/55920.35
=5.27 %

Automatic Data Processing's annualized ROA % for the quarter that ended in Jun. 2022 is calculated as:

ROA %=Net Income (Q: Jun. 2022 )/( (Total Assets (Q: Mar. 2022 )+Total Assets (Q: Jun. 2022 ))/ count )
=2502/( (72068.1+63068.2)/ 2 )
=2502/67568.15
=3.70 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data, the Net Income data used here is four times the quarterly (Jun. 2022) net income data. ROA % is displayed in the 30-year financial page.


Automatic Data Processing  (NAS:ADP) ROA % Explanation

ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A bank’s ROA % is typically well under 2%.

Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:

ROA %(Q: Jun. 2022 )
=Net Income/Total Assets
=2502/67568.15
=(Net Income / Revenue)*(Revenue / Total Assets)
=(2502 / 16003.6)*(16003.6 / 67568.15)
=Net Margin %*Asset Turnover
=15.63 %*0.2369
=3.70 %

Note: The Net Income data used here is four times the quarterly (Jun. 2022) net income data. The Revenue data used here is four times the quarterly (Jun. 2022) revenue data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).

Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.

E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.


Automatic Data Processing ROA % Related Terms

Thank you for viewing the detailed overview of Automatic Data Processing's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.


Automatic Data Processing Business Description

Automatic Data Processing logo
Address
One ADP Boulevard, Roseland, NJ, USA, 07068
ADP is a provider of payroll and human capital management solutions servicing the full scope of businesses from micro to global enterprises. ADP was established in 1949 and serves over 920,000 clients primarily in the United States. ADP's employer services segment offers payroll, HCM solutions, HR outsourcing, insurance and retirement services. The smaller but faster-growing PEO segment provides HR outsourcing solutions to small and midsize businesses through a co-employment model.
Executives
Goeckeler David director C/O WESTERN DIGITAL CORPORATION 5601 GREAT OAKS PARKWAY SAN JOSE CA 95119
Blanchard Augusto J officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Sperduto James T officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Magliulo Virginia officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Quevedo Alexander officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Kwon David officer: Corp VP ONE ADP BOULEVARD ROSELAD NJ 07068
D'ambrosio Christopher officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Haynesworth Linnie M director 214 N TRYON STREET CHARLOTTE NC 28202
Brown Laura G officer: Corp. VP ONE ADP BOULEVARD ROSELAND NJ 07068
Keene Nazzic S director 1710 SAIC DRIVE MCLEAN VA 22102
Michaud Brian L. officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Desilva Joseph officer: Corp VP ONE ADP BOULEVARD ROSELAND NJ 07068
Katsoudas Francine S director ONE ADP BOULEVARD ROSELAND NJ 07068
Winters Kathleen A officer: Corp. VP 101 COLUMBIA ROAD MORRISTOWN NJ 07960
Levin Matthew officer: Corp VP NEUSTAR, INC. 4600 CENTER OAK PLAZA STERLING VA 20166

Automatic Data Processing Headlines

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