Automatic Data Processing Inc (ADP)

Quick ratio

		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
Cash	US$ in thousands	3,347,800	2,680,600	2,216,400	2,104,900	2,913,400	3,291,700	1,641,300	1,441,400	2,083,500	1,828,400	1,345,000	1,207,700	1,436,300	1,634,200	1,745,000	1,602,100	2,575,200	1,891,500	1,602,200	1,613,100
Short-term investments	US$ in thousands	4,498,800	—	—	5,242,200	384,000	—	24,400	14,900	14,700	26,300	16,400	24,400	32,700	27,600	19,700	28,500	10,400	10,500	10,600	3,400
Receivables	US$ in thousands	3,579,100	3,547,900	3,503,500	3,316,700	3,428,200	3,460,700	3,372,400	3,095,100	3,009,600	3,072,100	3,162,300	2,939,200	3,170,600	3,250,700	2,736,000	2,769,700	2,727,400	2,765,400	2,509,800	2,489,100
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
Quick ratio		1.15	0.14	0.11	1.00	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

June 30, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($3,347,800K + $4,498,800K + $3,579,100K) ÷ $9,935,000K
= 1.15

The quick ratio of Automatic Data Processing Inc. (ADP) has historically remained below 0.2 from September 2020 through March 2025, indicating a conservative liquidity position characterized by a limited ability to meet short-term obligations with liquid assets excluding inventories. During this period, the ratio fluctuated within a narrow range, generally between 0.08 and 0.15, reflecting consistent liquidity levels that are relatively tight but stable.

Between September 2020 and March 2022, the quick ratio demonstrated minor variations, predominantly fluctuating around 0.09 to 0.14, suggesting that ADP maintained a conservative stance towards short-term liquidity management during this timeframe. Notably, in September 2024, the ratio displayed a significant spike to 1.00, which is an extraordinary deviation compared to prior figures. This sudden increase indicates a temporary, substantial enhancement in liquid assets or a reduction in current liabilities at that particular period. However, this anomalous reading does not align with the previous pattern and may be attributable to a one-off event or accounting adjustment.

Following this outlier, the ratio reverted to a more typical range around 0.10 to 0.15 in subsequent periods, including March 2025, when it registered at 0.14. The recent trend suggests a return to a stable, albeit low, liquidity position.

Overall, the historical data indicates that ADP’s quick ratio has consistently remained below 1.0, emphasizing a profile that relies primarily on liquid assets relative to current liabilities but with a conservative buffer. The lack of sustained high ratios suggests that the company operates with tight liquidity, which may reflect efficient capital management, strong cash flows, or a strategic preference to maintain minimal liquid assets relative to liabilities. The abrupt peak in September 2024 might warrant further investigation to understand underlying causes and assess their impact on the firm's liquidity health.