Automatic Data Processing (MIL:1ADP) Interest Coverage : 7.92 (As of Dec. 2024)

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What is Automatic Data Processing Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Automatic Data Processing's Operating Income for the three months ended in Dec. 2024 was €981 Mil. Automatic Data Processing's Interest Expense for the three months ended in Dec. 2024 was €-124 Mil. Automatic Data Processing's interest coverage for the quarter that ended in Dec. 2024 was 7.92. The higher the ratio, the stronger the company's financial strength is.

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

MIL:1ADP' s Interest Coverage Range Over the Past 10 Years
Min: 9.51 Med: 24.35 Max: 251.74
Current: 9.51

MIL:1ADP's Interest Coverage is ranked worse than
66.65% of 1622 companies
in the Software industry
Industry Median: 28.185 vs MIL:1ADP: 9.51

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Automatic Data Processing Interest Coverage Historical Data

The historical data trend for Automatic Data Processing's Interest Coverage 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.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Automatic Data Processing Interest Coverage Chart

Automatic Data Processing Annual Data

Trend

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

Interest Coverage

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24.24

48.61

41.67

14.78

10.95

Automatic Data Processing Quarterly Data
	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24	Dec24
Interest Coverage	Get a 7-Day Free Trial															9.14	19.65	8.15	7.39	7.92

Competitive Comparison of Automatic Data Processing's Interest Coverage

For the Software - Application subindustry, Automatic Data Processing's Interest Coverage, along with its competitors' market caps and Interest Coverage 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's Interest Coverage Distribution in the Software Industry

For the Software industry and Technology sector, Automatic Data Processing's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Automatic Data Processing's Interest Coverage falls into.

Automatic Data Processing Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Automatic Data Processing's Interest Coverage for the fiscal year that ended in Jun. 2024 is calculated as

Here, for the fiscal year that ended in Jun. 2024, Automatic Data Processing's Interest Expense was €-336 Mil. Its Operating Income was €3,676 Mil. And its Long-Term Debt & Capital Lease Obligation was €3,084 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jun. 2024 )	/	Interest Expense (A: Jun. 2024 )
	=	-1	*	3675.589	/	-335.741
	=	10.95

Automatic Data Processing's Interest Coverage for the quarter that ended in Dec. 2024 is calculated as

Here, for the three months ended in Dec. 2024, Automatic Data Processing's Interest Expense was €-124 Mil. Its Operating Income was €981 Mil. And its Long-Term Debt & Capital Lease Obligation was €3,135 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2024 )	/	Interest Expense (Q: Dec. 2024 )
	=	-1	*	980.785	/	-123.768
	=	7.92

The higher the ratio, the stronger the company's Financial Strength is.

Automatic Data Processing (MIL:1ADP) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Automatic Data Processing Interest Coverage Related Terms

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Automatic Data Processing Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Automatic Data Processing Inc (MIL:1ADP) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

ADP:USA ADAP:Mexico 0HJI:UK ADP:Germany ADP:Germany ADPR34:Brazil ADP:Austria ADP:Argentina

Address

One ADP Boulevard, Roseland, NJ, USA, 07068

Website

https://www.adp.com

Automatic Data Processing is a global technology company providing cloud-based human capital management solutions enabling clients to better implement payroll, talent, time, tax, and benefits administration. Additionally, ADP provides human resource outsourcing solutions that allow customers to offload some of their traditional HR tasks. The company operates through two segments: employer services and the professional employer organization services. Employer services consists of the company's HCM products as well as a la carte HRO solutions. PEO services contains ADP's comprehensive HRO solution where it acts as a co-employer with its customer. As of fiscal 2024, ADP serves over 1.1 million clients and pays over 42 million workers across 140 countries.

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