Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits). He defines ROC (Joel Greenblatt) % as EBIT divided by the total of Property, Plant and Equipment and net working capital. Paychex's annualized ROC (Joel Greenblatt) % for the quarter that ended in Feb. 2023 was 546.90%.
The historical rank and industry rank for Paychex's ROC (Joel Greenblatt) % or its related term are showing as below:
PAYX'
s ROC (Joel Greenblatt) % Range Over the Past 10 Years
Min: 255.57 Med: 285.11 Max: 380.3
Current: 427.14
During the past 13 years, Paychex's highest ROC (Joel Greenblatt) % was 380.30%. The lowest was 255.57%. And the median was 285.11%.
PAYX's ROC (Joel Greenblatt) % is ranked better than 93.85% of 1041
companies
in the Business Services industry
Industry Median: 20.84
vs PAYX: 427.14
Paychex's 5-Year average Growth Rate of ROC (Joel Greenblatt) % was 6.00% per year.
Paychex ROC (Joel Greenblatt) % Historical Data
The historical data trend for Paychex's ROC (Joel Greenblatt) % 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
ROC (Joel Greenblatt) %
277.15
335.94
317.09
287.95
380.30
Paychex Quarterly Data
May18
Aug18
Nov18
Feb19
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
ROC (Joel Greenblatt) %
460.12
330.38
420.74
413.80
546.90
Competitive Comparison
For the Staffing & Employment Services subindustry, Paychex's ROC (Joel Greenblatt) %, along with its competitors' market caps and ROC (Joel Greenblatt) % 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 ROC (Joel Greenblatt) % Distribution
For the Business Services industry and Industrials sector, Paychex's ROC (Joel Greenblatt) % distribution charts can be found below:
* The bar in red indicates where Paychex's ROC (Joel Greenblatt) % falls in comparison to its industry or sector. The grey bar indicates the ROC (Joel Greenblatt) %'s extreme value range as defined by GuruFocus.
Paychex ROC (Joel Greenblatt) % Calculation
Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits) . He defines Return on Capital as follows:
EBIT stands for Earnings Before Interest and Taxes.
Fixed Assets are also known as non-current assets. They include the Property, Plant and Equipment that the firm needs in its operation.
GuruFocus calculates net working capital as: (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Deferred Revenue + Other Current Liabilities). We're trying to account for OPERATING assets and liabilities (part of daily business) when calculating working capital. Cash and marketable securities are considered NON-OPERATING assets and are not included in calculation. We will also back out all interest bearing debt, short term debt and the portion of long term debt that is due in the current period from the current liabilities. This debt will be considered when computing cost of capital and it would be inappropriate to count it twice.
Note:
The EBIT data used here is four times the quarterly (Feb. 2023) EBIT 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.
The way Joel Greenblatt defines Return on Capital is a more accurate measure of how efficiently the company generates returns onthe capital actually invested in the business. EBIT is used instead of net income because the tax and interest payment may be affected by factors other than the core business operation. Intangible assets are not included in the calculation because they don't need to be replaced.
Thank you for viewing the detailed overview of Paychex's ROC (Joel Greenblatt) % provided by GuruFocus.com. Please click on the following links to see related term pages.
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.
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