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Paychex (NAS:PAYX) Financial Strength

: 8 (As of Nov. 2022)
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Paychex has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.

Good Sign:

Paychex Inc shows strong financial strength.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Paychex's Interest Coverage for the quarter that ended in Nov. 2022 was 51.34. Paychex's debt to revenue ratio for the quarter that ended in Nov. 2022 was 0.18. As of today, Paychex's Altman Z-Score is 5.57.


Competitive Comparison

For the Staffing & Employment Services subindustry, Paychex's Financial Strength, along with its competitors' market caps and Financial Strength 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.

   

Paychex Financial Strength Distribution

For the Business Services industry and Industrials sector, Paychex's Financial Strength distribution charts can be found below:

* The bar in red indicates where Paychex's Financial Strength falls in comparison to its industry or sector. The grey bar indicates the Financial Strength's extreme value range as defined by GuruFocus.



Paychex Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

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

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:

Paychex's Interest Expense for the months ended in Nov. 2022 was $-9 Mil. Its Operating Income for the months ended in Nov. 2022 was $472 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Nov. 2022 was $865 Mil.

Paychex's Interest Coverage for the quarter that ended in Nov. 2022 is

Interest Coverage=-1*Operating Income (Q: Nov. 2022 )/Interest Expense (Q: Nov. 2022 )
=-1*472.3/-9.2
=51.34

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Paychex's Debt to Revenue Ratio for the quarter that ended in Nov. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Nov. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(10.1 + 864.7) / 4761.2
=0.18

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Paychex has a Z-score of 5.57, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 5.57 is strong.

* 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.


Paychex  (NAS:PAYX) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Paychex has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.


Paychex Financial Strength Related Terms

Thank you for viewing the detailed overview of Paychex's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Paychex (NAS:PAYX) Business Description

Paychex logo
Traded in Other Exchanges
Address
911 Panorama Trail South, Rochester, NY, USA, 14625-2396
Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, established in 1979, services over 730,000 clients and pays over 1 in 12 U.S. private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance agency services.
Executives
Kevin A Price director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Karen E. Saunders-mcclendon officer: VP, Chief Human Resources Offi 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Robert L. Schrader officer: VP/Controller 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Kara Wilson director C/O SUCCESSFACTORS, INC., 1500 FASHION ISLAND BLVD., SUITE 300, SAN MATEO CA 94404
Tom Bonadio director 1021 HOWARD AVE, SAN CARLOS CA 94070
John B Gibson officer: Sr. VP, Service CONVERGYS CORPORATION, 201 EAST FOURTH STREET, CINCINNATI OH 45202
Mark Anthony Bottini officer: Sr. VP of Sales 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Kevin N Hill officer: Vice President 50 WREN FIELD LN, PITTSFORD NY 114534
Michael E Gioja officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Rebecca F Bernson officer: Sr. Vice President, Sales 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Efrain Rivera officer: Sr. Vice President, CFO 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Laurie L. Zaucha officer: Vice President 400 WILLOWBROOK OFFICE PARK, FAIRPORT NY 14450
Joseph Doody director CASELLA WASTE SYSTEMS INC, 25 GREENS HILL LANE PO BOX 866, RUTLAND VT 05701
Delbert M Humenik officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Jennifer R. Vossler officer: VP/Controller 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625

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