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Paychex (NAS:PAYX) ROA %

: 18.87% (As of Feb. 2023)
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ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Paychex's annualized Net Income for the quarter that ended in Feb. 2023 was $1,870 Mil. Paychex's average Total Assets over the quarter that ended in Feb. 2023 was $9,909 Mil. Therefore, Paychex's annualized ROA % for the quarter that ended in Feb. 2023 was 18.87%.

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

PAYX' s ROA % Range Over the Past 10 Years
Min: 9   Med: 12.4   Max: 15.38
Current: 15.38

During the past 13 years, Paychex's highest ROA % was 15.38%. The lowest was 9.00%. And the median was 12.40%.

PAYX's ROA % is ranked better than
92.65% of 1061 companies
in the Business Services industry
Industry Median: 3.57 vs PAYX: 15.38

Paychex ROA % Historical Data

The historical data trend for Paychex'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.

Paychex Annual Data
Trend May13 May14 May15 May16 May17 May18 May19 May20 May21 May22
ROA %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.48 12.47 12.75 12.35 14.77

Paychex Quarterly Data
May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23
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 17.25 11.90 16.17 15.72 18.87

Competitive Comparison

For the Staffing & Employment Services subindustry, Paychex'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.

   

Paychex ROA % Distribution

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

* The bar in red indicates where Paychex's ROA % falls in comparison to its industry or sector. The grey bar indicates the ROA %'s extreme value range as defined by GuruFocus.



Paychex ROA % Calculation

Paychex's annualized ROA % for the fiscal year that ended in May. 2022 is calculated as:

ROA %=Net Income (A: May. 2022 )/( (Total Assets (A: May. 2021 )+Total Assets (A: May. 2022 ))/ count )
=1392.8/( (9227.2+9635.2)/ 2 )
=1392.8/9431.2
=14.77 %

Paychex's annualized ROA % for the quarter that ended in Feb. 2023 is calculated as:

ROA %=Net Income (Q: Feb. 2023 )/( (Total Assets (Q: Nov. 2022 )+Total Assets (Q: Feb. 2023 ))/ count )
=1869.6/( (9214.3+10603.6)/ 2 )
=1869.6/9908.95
=18.87 %

* 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 (Feb. 2023) net income data. ROA % is displayed in the 30-year financial page.


Paychex  (NAS:PAYX) 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: Feb. 2023 )
=Net Income/Total Assets
=1869.6/9908.95
=(Net Income / Revenue)*(Revenue / Total Assets)
=(1869.6 / 5524)*(5524 / 9908.95)
=Net Margin %*Asset Turnover
=33.85 %*0.5575
=18.87 %

Note: The Net Income data used here is four times the quarterly (Feb. 2023) net income data. The Revenue data used here is four times the quarterly (Feb. 2023) 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.


Paychex ROA % Related Terms

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


Paychex (NAS:PAYX) Business Description

Paychex logo
Traded in Other Exchanges
Address
911 Panorama Trail South, Rochester, NY, USA, 14625-2396
Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, established in 1979, services over 730,000 clients and pays over 1 in 12 U.S. private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance agency services.
Executives
Kevin A Price director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Karen E. Saunders-mcclendon officer: VP, Chief Human Resources Offi 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Robert L. Schrader officer: VP/Controller 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Kara Wilson director C/O SUCCESSFACTORS, INC., 1500 FASHION ISLAND BLVD., SUITE 300, SAN MATEO CA 94404
Tom Bonadio director 1021 HOWARD AVE, SAN CARLOS CA 94070
John B Gibson officer: Sr. VP, Service CONVERGYS CORPORATION, 201 EAST FOURTH STREET, CINCINNATI OH 45202
Mark Anthony Bottini officer: Sr. VP of Sales 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Kevin N Hill officer: Vice President 50 WREN FIELD LN, PITTSFORD NY 114534
Michael E Gioja officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Rebecca F Bernson officer: Sr. Vice President, Sales 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Efrain Rivera officer: Sr. Vice President, CFO 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Laurie L. Zaucha officer: Vice President 400 WILLOWBROOK OFFICE PARK, FAIRPORT NY 14450
Joseph Doody director CASELLA WASTE SYSTEMS INC, 25 GREENS HILL LANE PO BOX 866, RUTLAND VT 05701
Delbert M Humenik officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Jennifer R. Vossler officer: VP/Controller 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625

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