Automatic Data Processing Inc (ADP)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.01 | 1.01 | 1.01 | 0.98 | 0.99 | 1.00 | 0.99 | 0.97 | 0.99 | 1.01 | 1.04 | 1.05 | 1.07 | 1.05 | 1.06 | 1.08 | 1.05 | 1.03 | 1.02 | 1.01 |
| Quick ratio | 0.15 | 0.12 | 0.10 | 0.11 | 0.12 | 0.10 | 0.10 | 0.11 | 0.08 | 0.08 | 0.09 | 0.09 | 0.14 | 0.10 | 0.11 | 0.13 | 0.14 | 0.12 | 0.10 | 0.25 |
| Cash ratio | 0.07 | 0.06 | 0.03 | 0.04 | 0.05 | 0.04 | 0.03 | 0.03 | 0.03 | 0.03 | 0.04 | 0.03 | 0.07 | 0.04 | 0.04 | 0.05 | 0.06 | 0.05 | 0.04 | 0.17 |
Automatic Data Processing Inc's liquidity ratios show a fluctuating trend over the past few quarters. The current ratio, which measures the company's ability to cover short-term obligations with current assets, has ranged between 0.97 and 1.08. This indicates that the company may have some difficulty meeting its short-term liabilities, as a ratio below 1 suggests potential liquidity issues.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has shown an even lower range, fluctuating between 0.08 and 0.25. This suggests that the company may have limited ability to cover its immediate liabilities with its most liquid assets.
The cash ratio, which specifically measures the company's ability to cover current liabilities with cash and cash equivalents, has ranged between 0.03 and 0.17. This ratio indicates the most conservative measure of liquidity, with values generally lower than the current and quick ratios.
Overall, the liquidity ratios of Automatic Data Processing Inc indicate some potential challenges in meeting short-term obligations, particularly seen in the quick and cash ratios. It is important for the company to closely monitor its liquidity position and take necessary steps to improve cash flow management and maintain sufficient reserves to meet its financial commitments.
See also:
Automatic Data Processing Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 62.68 | 1,267.34 | 64.57 | 952.85 | 58.46 | 61.90 | 64.97 | 956.22 | 1,440.72 | 1,720.58 | 1,388.51 | 1,444.24 | 1,110.45 | 1,452.77 | 1,398.31 | 1,247.59 | 1,210.99 | 1,403.24 | 1,682.45 | 1,018.14 |
The cash conversion cycle of Automatic Data Processing Inc has shown significant fluctuations over the past few quarters. The cycle measures the time it takes for a company to convert its investment in inventory into cash flows from sales.
Looking at the data, the cash conversion cycle has ranged from 58.46 days to as high as 1,720.58 days over the past five years. The company experienced extreme values in the first quarter of 2022 and the second quarter of 2022, indicating potential operational inefficiencies or challenges in managing its working capital effectively during those periods.
In more recent quarters, the cash conversion cycle has shown some improvement, with values ranging from 62.68 days to 64.97 days. This suggests that the company may have implemented strategies to streamline its processes and manage its working capital more efficiently.
Overall, while the cash conversion cycle of Automatic Data Processing Inc has shown volatility in the past, the recent trend towards lower values is a positive sign of improved liquidity management. Monitoring this ratio going forward will be essential to ensure continued operational efficiency and financial health.