Automatic Data Processing Inc (ADP)

Cash ratio

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Cash and cash equivalents	US$ in thousands	3,347,800	2,913,400	2,083,500	1,436,300	2,575,200
Short-term investments	US$ in thousands	4,498,800	384,000	14,700	32,700	10,400
Total current liabilities	US$ in thousands	41,278,300	45,080,000	42,767,600	55,158,700	38,094,800
Cash ratio		0.19	0.07	0.05	0.03	0.07

June 30, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($3,347,800K + $4,498,800K) ÷ $41,278,300K
= 0.19

The analysis of Automatic Data Processing Inc.'s cash ratio over the specified period indicates fluctuations in its liquidity position as measured by this metric. The cash ratio, which reflects the company's ability to cover its current liabilities with its cash and cash equivalents, was recorded at 0.07 as of June 30, 2021. This value decreased significantly to 0.03 by June 30, 2022, suggesting a reduction in the company's immediate liquidity buffer.

Subsequently, the cash ratio experienced a modest increase to 0.05 as of June 30, 2023, indicating a slight improvement in the company's capacity to meet short-term obligations with cash and equivalents, although it remained relatively low. The upward trend continued into 2024 with a ratio returning to 0.07, matching the levels observed in 2021, thus reflecting a stabilization of the liquidity position.

Most notably, by June 30, 2025, the cash ratio rose sharply to 0.19, nearly tripling compared to the 2021 figure. This substantial increase signifies a notable enhancement in the company's immediate liquidity, suggesting that the company has accumulated a higher level of cash relative to its current liabilities. Overall, the trend demonstrates a generally low but improving liquidity stance, with the most recent data indicating a meaningful strengthening of cash reserves relative to short-term liabilities.