Automatic Data Processing Inc (ADP)

Working capital 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
Revenue (ttm)	US$ in thousands	20,560,900	20,202,600	19,903,400	19,523,000	19,202,700	18,912,000	18,586,000	18,309,000	18,012,200	17,662,000	17,247,200	16,881,600	16,498,300	16,107,600	15,696,600	15,366,900	15,005,300	14,645,200	14,591,000	14,564,800
Total current assets	US$ in thousands	12,266,500	46,536,800	54,254,400	39,911,200	45,542,500	55,639,600	48,543,400	40,480,100	42,170,600	51,518,200	46,143,600	37,968,800	54,804,900	63,903,800	51,107,300	52,047,900	40,741,800	46,752,400	41,662,300	34,815,400
Total current liabilities	US$ in thousands	9,935,000	45,845,400	54,303,100	10,651,500	45,080,000	54,901,900	48,097,700	41,228,700	42,767,600	51,536,100	46,813,700	39,166,200	55,158,700	63,106,500	49,084,000	49,669,900	38,094,800	44,615,200	39,176,500	32,329,600
Working capital turnover		8.82	29.22	—	0.67	41.52	25.64	41.70	—	—	—	—	—	—	20.20	7.76	6.46	5.67	6.85	5.87	5.86

June 30, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $20,560,900K ÷ ($12,266,500K – $9,935,000K)
= 8.82

The working capital turnover ratio for Automatic Data Processing Inc (ADP) exhibits notable fluctuations over the specified periods. From September 30, 2020, through December 31, 2021, the ratio remained relatively stable, ranging between 5.86 and 7.76, indicating a consistent efficiency in generating sales from the company's working capital during this period.

A significant change is observed in the March 31, 2022, figure, which escalates sharply to 20.20, suggesting a substantial increase in sales relative to working capital. However, this elevated level does not persist, as data for subsequent periods (June 30, 2022, through September 30, 2022) are not available, implying either a pause in reporting or atypical accounting adjustments.

The data from December 31, 2022, show a dramatic rise to 41.70, the highest observed ratio within the dataset, indicating an extremely high efficiency in using working capital to generate sales at that time. Nonetheless, the ratio declines again in the subsequent quarters, with the March 31, 2024, figure decreasing to 25.64, and further diminishing to 0.67 by September 30, 2024, reflecting a sharp reduction in the efficiency of working capital utilization.

In the most recent periods, the ratios display considerable volatility. The December 31, 2024, data are missing, but the March 31, 2025, ratio is reported at 29.22, and June 30, 2025, at 8.82. This pattern indicates fluctuating operational efficiency and potentially changing management strategies regarding working capital management or variations in sales or receivables collections.

Overall, the trend demonstrates periods of both high and low working capital turnover, with the most extreme values occurring in late 2022 and mid-2024. The volatility suggests that ADP has experienced significant shifts in operational efficiency, possibly driven by varying sales activity, receivables management, or changes in working capital components over time.