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Automatic Data Processing ROE %

: 67.46% (As of Jun. 2022)
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ROE % is calculated as Net Income attributable to Common Stockholders (Net Income minus dividends to participating security holders) divided by its average Total Stockholders Equity over a certain period of time. Automatic Data Processing's annualized net income attributable to common stockholders for the quarter that ended in Jun. 2022 was $2,502 Mil. Automatic Data Processing's average Total Stockholders Equity over the quarter that ended in Jun. 2022 was $3,709 Mil. Therefore, Automatic Data Processing's annualized ROE % for the quarter that ended in Jun. 2022 was 67.46%.

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

ADP' s ROE % Range Over the Past 10 Years
Min: 22.85   Med: 42.77   Max: 66.3
Current: 62.77

During the past 13 years, Automatic Data Processing's highest ROE % was 66.30%. The lowest was 22.85%. And the median was 42.77%.

ADP's ROE % is ranked better than
97.22% of 1006 companies
in the Business Services industry
Industry Median: 8.59 vs ADP: 62.77

Automatic Data Processing ROE % Historical Data

The historical data trend for Automatic Data Processing's ROE % 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
ROE %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 43.27 45.24 44.23 45.50 66.30

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
ROE % 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 37.95 50.85 53.41 80.37 67.46

Competitive Comparison

For the Staffing & Employment Services subindustry, Automatic Data Processing's ROE %, along with its competitors' market caps and ROE % 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 ROE % Distribution

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

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



Automatic Data Processing ROE % Calculation

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

ROE %=Net Income attributable to Common Stockholders (A: Jun. 2022 )/( (Total Stockholders Equity (A: Jun. 2021 )+Total Stockholders Equity (A: Jun. 2022 ))/ count )
=2948.9/( (5670.1+3225.3)/ 2 )
=2948.9/4447.7
=66.30 %

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

ROE %=Net Income attributable to Common Stockholders (Q: Jun. 2022 )/( (Total Stockholders Equity (Q: Mar. 2022 )+Total Stockholders Equity (Q: Jun. 2022 ))/ count )
=2502/( (4192.9+3225.3)/ 2 )
=2502/3709.1
=67.46 %

* 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 ROE %, the net income attributable to common stockholders of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income attributable to common stockholders data used here is four times the quarterly (Jun. 2022) net income attributable to common stockholders data. ROE % is displayed in the 30-year financial page.


Automatic Data Processing  (NAS:ADP) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

ROE %**(Q: Jun. 2022 )
=Net Income/Total Stockholders Equity
=2502/3709.1
=(Net Income / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(2502 / 16003.6)*(16003.6 / 67568.15)*(67568.15 / 3709.1)
=Net Margin %*Asset Turnover*Equity Multiplier
=15.63 %*0.2369*18.2169
=ROA %*Equity Multiplier
=3.7 %*18.2169
=67.46 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %**(Q: Jun. 2022 )
=Net Income/Total Stockholders Equity
=2502/3709.1
=(Net Income /Pre-Tax Income) * (Pre-Tax Income/Operating Income) * (Operating Income/Revenue) * (Revenue/Total Assets) * (Total Assets/Total Stockholders Equity)
= (2502 / 3213.6) * (3213.6 / 2803.2) * (2803.2 / 16003.6) * (16003.6 / 67568.15) * (67568.15 / 3709.1)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.7786 * 1.1464 * 17.52 % * 0.2369 * 18.2169
=67.46 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Jun. 2022) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Jun. 2022) revenue data. The same rule applies to Pre-Tax Income and Operating Income.

* 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 ROE % used above is for Du Pont Analysis only. It is different from the defined ROE % page on our website, as here it uses Net Income instead of Net Income attributable to Common Stockholders in the calculation.


Be Aware

Net income attributable to common stockholders is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.


Automatic Data Processing ROE % Related Terms

Thank you for viewing the detailed overview of Automatic Data Processing's ROE % 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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