Automatic Data Processing Inc (ADP)

Payables turnover

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Cost of revenue (ttm)	US$ in thousands	14,783,700	14,550,600	14,396,100	14,213,000	14,005,000	13,871,700	13,632,900	13,436,000	13,171,400	12,907,800	12,614,700	12,374,300	12,152,900	10,915,000	10,044,900	9,189,300	8,445,200	8,379,100	8,232,600	8,138,700
Payables	US$ in thousands	100,600	84,600	76,800	67,400	96,800	74,800	85,300	82,700	110,200	81,700	103,500	77,800	141,100	112,200	113,900	111,200	102,000	115,500	132,900	108,800
Payables turnover		146.96	171.99	187.45	210.88	144.68	185.45	159.82	162.47	119.52	157.99	121.88	159.05	86.13	97.28	88.19	82.64	82.80	72.55	61.95	74.80

June 30, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $14,783,700K ÷ $100,600K
= 146.96

The payables turnover ratio for Automatic Data Processing Inc has shown variability over the past few quarters. The ratio measures how efficiently the company manages its trade payables by comparing the cost of goods sold to its average accounts payable balance.

From Dec 2019 to Mar 2020, there was a slight increase in the payables turnover ratio, indicating that the company was managing its payables more efficiently during this period. However, from Jun 2020 to Dec 2020, the ratio decreased significantly, suggesting that the company took longer to pay its suppliers during this time.

The payables turnover ratio saw a sharp increase from Dec 2020 to Mar 2021, indicating a significant improvement in payables management. Subsequently, the ratio fluctuated in the following quarters before showing an increasing trend from Mar 2022 to Jun 2023.

The most recent data point, Jun 2024, shows a relatively high payables turnover ratio of 146.96, which may suggest that the company is effectively managing its accounts payable by paying them off quickly. However, fluctuations in the ratio over time indicate that the company's payables management practices have varied during the periods analyzed.