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 %

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 %																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.

Annual Data Quarterly Data

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 %

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 banks 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.

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

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Paychex Inc (NAS:PAYX) » Definitions » ROA %

Comparable Companies

Traded in Other Exchanges

PAYX:Mexico PCX:Germany P1AY34:Brazil

Address

911 Panorama Trail South, Rochester, NY, USA, 14625-2396

Website

https://www.paychex.com

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