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Automatic Data Processing Beneish M-Score

: -2.46 (As of Today)
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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 -2.46 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:

ADP' s Beneish M-Score Range Over the Past 10 Years
Min: -5.97   Med: -2.46   Max: -1.42
Current: -2.46

During the past 13 years, the highest Beneish M-Score of Automatic Data Processing was -1.42. The lowest was -5.97. And the median was -2.46.


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.

* Premium members only.

Automatic Data Processing Annual Data
Trend Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.14 -2.34 -2.49 -2.52 -2.46

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
Beneish M-Score 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 -2.52 -2.53 -2.51 -2.43 -2.46

Competitive Comparison

For the Staffing & Employment Services 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 Beneish M-Score Distribution

For the Business Services industry and Industrials 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.



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:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0565+0.528 * 0.9931+0.404 * 0.8043+0.892 * 1.1004+0.115 * 0.9682
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9664+4.679 * -0.0031-0.327 * 1.0925
=-2.46

* 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.

This Year (Jun22) TTM:Last Year (Jun21) TTM:
Total Receivables was $3,171 Mil.
Revenue was 4000.9 + 4395 + 3919.4 + 3731.2 = $16,047 Mil.
Gross Profit was 1615 + 1882.8 + 1578.2 + 1508.6 = $6,585 Mil.
Total Current Assets was $54,805 Mil.
Total Assets was $63,068 Mil.
Property, Plant and Equipment(Net PPE) was $1,104 Mil.
Depreciation, Depletion and Amortization(DDA) was $515 Mil.
Selling, General, & Admin. Expense(SGA) was $3,233 Mil.
Total Current Liabilities was $55,159 Mil.
Long-Term Debt & Capital Lease Obligation was $3,358 Mil.
Net Income was 625.5 + 928.5 + 694.4 + 700.5 = $2,949 Mil.
Non Operating Income was -14.8 + 19.4 + 18.1 + 19.1 = $42 Mil.
Cash Flow from Operations was 912.9 + 971 + 1093.7 + 121.9 = $3,100 Mil.
Total Receivables was $2,727 Mil.
Revenue was 3633.8 + 3994.6 + 3590.3 + 3364.2 = $14,583 Mil.
Gross Profit was 1428.3 + 1716.5 + 1467.9 + 1329.9 = $5,943 Mil.
Total Current Assets was $40,742 Mil.
Total Assets was $48,773 Mil.
Property, Plant and Equipment(Net PPE) was $1,147 Mil.
Depreciation, Depletion and Amortization(DDA) was $511 Mil.
Selling, General, & Admin. Expense(SGA) was $3,041 Mil.
Total Current Liabilities was $38,095 Mil.
Long-Term Debt & Capital Lease Obligation was $3,328 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)
=(3170.6 / 16046.5) / (2727.4 / 14582.9)
=0.19758826 / 0.18702727
=1.0565

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)
=(5942.6 / 14582.9) / (6584.6 / 16046.5)
=0.40750468 / 0.41034494
=0.9931

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 - (54804.9 + 1103.5) / 63068.2) / (1 - (40741.8 + 1146.7) / 48772.5)
=0.11352472 / 0.14114511
=0.8043

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
=16046.5 / 14582.9
=1.1004

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))
=(510.7 / (510.7 + 1146.7)) / (515.1 / (515.1 + 1103.5))
=0.30813322 / 0.31823798
=0.9682

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)
=(3233.2 / 16046.5) / (3040.5 / 14582.9)
=0.20148942 / 0.20849762
=0.9664

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)
=((3358 + 55158.7) / 63068.2) / ((3328.2 + 38094.8) / 48772.5)
=0.92783209 / 0.84931057
=1.0925

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
=(2948.9 - 41.8 - 3099.5) / 63068.2
=-0.0031

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 -2.46 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

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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