What is Automatic Data Processing Return-on-Tangible-Equity?
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Automatic Data Processing's annualized net income for the quarter that ended in Mar. 2025 was $4,998 Mil. Automatic Data Processing's average shareholder tangible equity for the quarter that ended in Mar. 2025 was $553 Mil. Therefore, Automatic Data Processing's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2025 was 903.88%.
The historical rank and industry rank for Automatic Data Processing's Return-on-Tangible-Equity or its related term are showing as below:
ADP'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 42.67 Med: 117.01 Max: 1096.92
Current: 435.62
During the past 13 years, Automatic Data Processing's highest Return-on-Tangible-Equity was 1,096.92%. The lowest was 42.67%. And the median was 117.01%.
ADP's Return-on-Tangible-Equity is ranked better than 90.59% of 2412
companies
in the Software industry
Industry Median: 8.84
vs ADP: 435.62
Automatic Data Processing Return-on-Tangible-Equity Historical Data
The historical data trend for Automatic Data Processing's Return-on-Tangible-Equity 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 Return-on-Tangible-Equity Chart
Competitive Comparison of Automatic Data Processing's Return-on-Tangible-Equity
For the Software - Application subindustry, Automatic Data Processing's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity Distribution in the Software Industry
For the Software industry and Technology sector, Automatic Data Processing's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Automatic Data Processing's Return-on-Tangible-Equity falls into.
* 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2025) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
Automatic Data Processing (NAS:ADP) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Automatic Data Processing Return-on-Tangible-Equity Related Terms
Thank you for viewing the detailed overview of Automatic Data Processing's Return-on-Tangible-Equity provided by GuruFocus.com. Please click on the following links to see related term pages.
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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