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Automatic Data Processing Interest Coverage

: 26.35 (As of Jun. 2022)
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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 Jun. 2022 was $701 Mil. Automatic Data Processing's Interest Expense for the three months ended in Jun. 2022 was $-27 Mil. Automatic Data Processing's interest coverage for the quarter that ended in Jun. 2022 was 26.35. 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:

ADP' s Interest Coverage Range Over the Past 10 Years
Min: 18.96   Med: 36.59   Max: 251.74
Current: 40.92


ADP's Interest Coverage is ranked better than
64.75% of 783 companies
in the Business Services industry
Industry Median: 17.48 vs ADP: 40.92

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.

* Premium members only.

Automatic Data Processing Annual Data
Trend Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22
Interest Coverage
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 20.36 18.96 24.24 48.61 40.92

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
Interest Coverage 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 33.97 42.67 43.26 57.90 26.35

Competitive Comparison

For the Staffing & Employment Services 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 Interest Coverage Distribution

For the Business Services industry and Industrials 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.


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. 2022 is calculated as

Here, for the fiscal year that ended in Jun. 2022, Automatic Data Processing's Interest Expense was $-82 Mil. Its Operating Income was $3,351 Mil. And its Long-Term Debt & Capital Lease Obligation was $3,358 Mil.

Interest Coverage=-1* Operating Income (A: Jun. 2022 )/Interest Expense (A: Jun. 2022 )
=-1*3351.4/-81.9
=40.92

Automatic Data Processing's Interest Coverage for the quarter that ended in Jun. 2022 is calculated as

Here, for the three months ended in Jun. 2022, Automatic Data Processing's Interest Expense was $-27 Mil. Its Operating Income was $701 Mil. And its Long-Term Debt & Capital Lease Obligation was $3,358 Mil.

Interest Coverage=-1* Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*700.8/-26.6
=26.35

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


Automatic Data Processing  (NAS:ADP) 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

Thank you for viewing the detailed overview of Automatic Data Processing's Interest Coverage 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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