Automatic Data Processing (XTER:ADP) Beneish M-Score : -2.44 (As of Dec. 12, 2024)

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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 -2.44 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:

XTER:ADP' s Beneish M-Score Range Over the Past 10 Years
Min: -2.81 Med: -2.48 Max: -2.04
Current: -2.44

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
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.49	-2.48	-2.42	-2.42	-2.44

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.

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 * 0.9927

0.528 * 0.9918

0.404 * 1.091

0.892 * 1.038

0.115 * 0.9919

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9991

4.679 * -0.016771

0.327 * 0.9541

-2.48

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was €2,988 Mil.
Revenue was 4126.039 + 4172.789 + 4538.36 + 4073.956 = €16,911 Mil.
Gross Profit was 1753.076 + 1728.033 + 1991.616 + 1724.969 = €7,198 Mil.
Total Current Assets was €35,960 Mil.
Total Assets was €44,610 Mil.
Property, Plant and Equipment(Net PPE) was €951 Mil.
Depreciation, Depletion and Amortization(DDA) was €512 Mil.
Selling, General, & Admin. Expense(SGA) was €3,493 Mil.
Total Current Liabilities was €35,475 Mil.
Long-Term Debt & Capital Lease Obligation was €2,971 Mil.
Net Income was 861.626 + 770.42 + 1090.108 + 805.493 = €3,528 Mil.
Non Operating Income was 9.01 + -0.65 + -15.824 + 7.244 = €-0 Mil.
Cash Flow from Operations was 742.784 + 1208.257 + 1378.252 + 946.711 = €4,276 Mil.

Total Receivables was €2,900 Mil.
Revenue was 4039.126 + 3915.458 + 4369.626 + 3968.387 = €16,293 Mil.
Gross Profit was 1682.196 + 1621.526 + 1918.996 + 1654.926 = €6,878 Mil.
Total Current Assets was €37,930 Mil.
Total Assets was €46,216 Mil.
Property, Plant and Equipment(Net PPE) was €975 Mil.
Depreciation, Depletion and Amortization(DDA) was €519 Mil.
Selling, General, & Admin. Expense(SGA) was €3,368 Mil.
Total Current Liabilities was €38,631 Mil.
Long-Term Debt & Capital Lease Obligation was €3,115 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)
	=	(2988.347 / 16911.144)	/	(2900.109 / 16292.597)
	=	0.176709	/	0.178002
	=	0.9927

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)
	=	(6877.644 / 16292.597)	/	(7197.694 / 16911.144)
	=	0.422133	/	0.425618
	=	0.9918

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 - (35959.991 + 950.555) / 44609.771)	/	(1 - (37929.854 + 975.323) / 46216.213)
	=	0.172591	/	0.158192
	=	1.091

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
	=	16911.144	/	16292.597
	=	1.038

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))
	=	(519.272 / (519.272 + 975.323))	/	(512.448 / (512.448 + 950.555))
	=	0.347433	/	0.350271
	=	0.9919

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)
	=	(3492.593 / 16911.144)	/	(3367.883 / 16292.597)
	=	0.206526	/	0.206712
	=	0.9991

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)
	=	((2971.048 + 35474.532) / 44609.771)	/	((3114.682 + 38631.292) / 46216.213)
	=	0.86182	/	0.903276
	=	0.9541

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
	=	(3527.647 - -0.22	-	4276.004)	/	44609.771
	=	-0.016771

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 -2.48 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 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

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 1 million clients primarily in the United States. ADP's employer services segment offers payroll, human capital management solutions, human resources outsourcing, insurance and retirement services. The smaller but faster-growing professional employer organization segment provides HR outsourcing solutions to small and midsize businesses through a co-employment model.