Automatic Data Processing (LTS:0HJI) Beneish M-Score : -2.49 (As of Mar. 27, 2025)

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What is Automatic Data Processing Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.49 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Automatic Data Processing's Beneish M-Score or its related term are showing as below:

LTS:0HJI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.81 Med: -2.48 Max: -2.04
Current: -2.49

During the past 13 years, the highest Beneish M-Score of Automatic Data Processing was -2.04. The lowest was -2.81. And the median was -2.48.

Automatic Data Processing Beneish M-Score Historical Data

The historical data trend for Automatic Data Processing's Beneish M-Score 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.

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Automatic Data Processing Beneish M-Score Chart

Automatic Data Processing Annual Data

Trend

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

Beneish M-Score

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-2.49

-2.52

-2.46

-2.48

-2.42

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
Beneish M-Score	Get a 7-Day Free Trial															-2.48	-2.42	-2.42	-2.44	-2.49

Competitive Comparison of Automatic Data Processing's Beneish M-Score

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

For the Software industry and Technology sector, Automatic Data Processing's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Automatic Data Processing's Beneish M-Score falls into.

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Automatic Data Processing Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Automatic Data Processing for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9777

0.528 * 0.9941

0.404 * 1.0491

0.892 * 1.0626

0.115 * 0.9765

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9976

4.679 * -0.01309

0.327 * 0.9972

-2.49

This Year (Dec24) TTM:

Last Year (Dec23) TTM:

Total Receivables was $3,504 Mil.
Revenue was 4775.6 + 4579.4 + 4491.7 + 4933 = $18,780 Mil.
Gross Profit was 2033.1 + 1945.7 + 1860.1 + 2164.8 = $8,004 Mil.
Total Current Assets was $54,254 Mil.
Total Assets was $64,097 Mil.
Property, Plant and Equipment(Net PPE) was $1,025 Mil.
Depreciation, Depletion and Amortization(DDA) was $570 Mil.
Selling, General, & Admin. Expense(SGA) was $3,892 Mil.
Total Current Liabilities was $54,303 Mil.
Long-Term Debt & Capital Lease Obligation was $3,282 Mil.
Net Income was 963.2 + 956.3 + 829.3 + 1184.9 = $3,934 Mil.
Non Operating Income was 7.2 + 10 + -0.7 + -17.2 = $-1 Mil.
Cash Flow from Operations was 1150.3 + 824.4 + 1300.6 + 1498.1 = $4,773 Mil.

Total Receivables was $3,372 Mil.
Revenue was 4442.7 + 4310.7 + 4242.1 + 4678.4 = $17,674 Mil.
Gross Profit was 1881.1 + 1795.3 + 1756.8 + 2054.6 = $7,488 Mil.
Total Current Assets was $48,543 Mil.
Total Assets was $57,069 Mil.
Property, Plant and Equipment(Net PPE) was $1,043 Mil.
Depreciation, Depletion and Amortization(DDA) was $559 Mil.
Selling, General, & Admin. Expense(SGA) was $3,672 Mil.
Total Current Liabilities was $48,098 Mil.
Long-Term Debt & Capital Lease Obligation was $3,317 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI	=	(Receivables_t / Revenue_t)	/	(Receivables_t-1 / Revenue_t-1)
	=	(3503.5 / 18779.7)	/	(3372.4 / 17673.9)
	=	0.186558	/	0.190812
	=	0.9777

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI	=	GrossMargin_t-1	/	GrossMargin_t
	=	(GrossProfit_t-1 / Revenue_t-1)	/	(GrossProfit_t / Revenue_t)
	=	(7487.8 / 17673.9)	/	(8003.7 / 18779.7)
	=	0.423664	/	0.426189
	=	0.9941

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (54254.4 + 1025.1) / 64096.7)	/	(1 - (48543.4 + 1043) / 57069.4)
	=	0.137561	/	0.131121
	=	1.0491

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI	=	Sales_t	/	Sales_t-1
	=	Revenue_t	/	Revenue_t-1
	=	18779.7	/	17673.9
	=	1.0626

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI	=	(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))	/	(Depreciation_t / (Depreciaton_t + PPE_t))
	=	(559 / (559 + 1043))	/	(570 / (570 + 1025.1))
	=	0.348939	/	0.357344
	=	0.9765

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI	=	(SGA_t / Sales_t)	/	(SGA_t-1 /Sales_t-1)
	=	(3892 / 18779.7)	/	(3671.8 / 17673.9)
	=	0.207245	/	0.207753
	=	0.9976

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((3282.3 + 54303.1) / 64096.7)	/	((3317 + 48097.7) / 57069.4)
	=	0.898414	/	0.900915
	=	0.9972

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA	=	(IncomefromContinuingOperations_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(NetIncome_t - NonOperatingIncome_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(3933.7 - -0.7	-	4773.4)	/	64096.7
	=	-0.01309

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Automatic Data Processing has a M-score of -2.49 suggests that the company is unlikely to be a manipulator.

Automatic Data Processing Beneish M-Score Related Terms

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Automatic Data Processing Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

ADP:USA ADAP:Mexico 1ADP:Italy 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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