Automatic Data Processing Inc (ADP)

Payables turnover

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 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
Cost of revenue (ttm) US$ in thousands 10,181,000 10,041,600 9,911,000 9,737,200 9,611,900 9,492,700 9,565,400 9,662,700 9,757,200 9,667,200 9,555,600 9,272,100 8,938,400 8,776,400 8,390,600 8,197,900 8,031,200 7,925,000 7,893,300 7,872,400
Payables US$ in thousands 169,100 146,300 186,400 145,200 100,600 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
Payables turnover 60.21 68.64 53.17 67.06 95.55 112.21 124.55 143.36 100.80 129.24 112.02 112.12 81.11 107.42 81.07 105.37 56.92 70.63 69.30 70.79

June 30, 2025 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $10,181,000K ÷ $169,100K
= 60.21

The payables turnover ratio for Automatic Data Processing Inc exhibits notable fluctuations over the analyzed period. Initially, at September 30, 2020, the ratio stood at approximately 70.79, indicating a relatively high frequency of paying off its accounts payable within a given period. It experienced a slight decrease by December 31, 2020, to around 69.30, suggesting a marginal elongation in the payment cycle.

Throughout 2021, the ratio remained fairly stable, with values such as 70.63 at March 31 and then rising significantly to 105.37 at September 30, indicating an increased efficiency in settling payables during that period. The ratio remained elevated in the latter part of 2021 and into early 2022, reaching over 107, suggesting consistent and possibly faster payments relative to earlier periods.

In 2022, the ratio decreased somewhat to around 81.11 by June 30 but then surged again to reach a peak of approximately 112.12 by September 30. This upward trend persisted into early 2023, with the ratio rising to 129.24 at March 31 2023, reflecting a period of accelerated payments.

Subsequently, the ratio declined somewhat in mid-2023, falling to 100.80 by June 30 and then increased again to 143.36 at September 30, which marks the highest point in the dataset. The subsequent quarters saw a decline, with the ratio reducing to 124.55 at December 31, 2023, and further down to 112.21 at March 31, 2024, indicating a slowing in the pace of settling payables.

By mid-2024, the ratio dropped further to 67.06 at September 30, and continued to fall to 53.17 at December 31, 2024, which could suggest extended payment cycles or delays in settling payables. In the early part of 2025, the ratio began to rebound slightly, reaching 68.64 at March 31 and 60.21 by June 30, pointing to a modest contraction in the payables payment frequency.

Overall, the payables turnover ratio has shown periods of both acceleration and deceleration, reflecting changes in payment policies, liquidity positions, or strategic vendor relations. The significant peaks in late 2022 and early 2023 indicate times of faster payables settlement, whereas the latter part of 2024 shows a trend toward slower payments, possibly hinting at cash flow adjustments or strategic financial planning.


See also:

Automatic Data Processing Inc Payables Turnover (Quarterly Data)