Automatic Data Processing Inc (ADP)
Profitability ratios
Return on sales
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 23.01% | 22.64% | 22.21% | 22.20% | 22.25% | 20.99% | 20.57% | 20.25% | 20.17% | 19.75% | 19.54% | 19.40% | 19.03% | 25.33% | 31.09% | 36.91% | 42.12% | 42.97% | 43.12% | 43.07% |
| Operating profit margin | -43.79% | -44.41% | -45.34% | -45.45% | -45.53% | -47.85% | -48.61% | -49.22% | -49.39% | -50.14% | -50.48% | -50.67% | -51.28% | -28.07% | -27.73% | -27.45% | -27.94% | -26.59% | -26.83% | -27.23% |
| Pretax margin | 25.37% | 25.46% | 24.89% | 24.75% | 24.64% | 24.12% | 23.66% | 23.23% | 23.06% | 22.99% | 22.80% | 22.77% | 22.39% | 21.86% | 21.99% | 22.03% | 21.81% | 22.36% | 22.06% | 21.67% |
| Net profit margin | 19.54% | 19.67% | 19.22% | 19.12% | 18.94% | 18.57% | 18.33% | 17.97% | 17.87% | 17.79% | 17.50% | 17.57% | 17.31% | 16.91% | 17.03% | 17.07% | 16.90% | 17.22% | 17.02% | 16.58% |
Automatic Data Processing Inc's profitability ratios have seen fluctuations over the past several quarters.
1. Gross profit margin has shown a decreasing trend, falling from a high of 43.07% in Q4 2019 to 23.01% in Q2 2024. This indicates that the company's ability to generate profit from its sales has decreased over time.
2. Operating profit margin has also been on a downward trend, with a negative margin in recent quarters. This suggests that the company is facing challenges in controlling its operating expenses and generating profits from its core business operations.
3. Pretax margin, on the other hand, has maintained a relatively stable level around 22-25%, indicating that the company's income before taxes has been consistent relative to its revenues.
4. Net profit margin has shown slight fluctuations but has generally remained above 16% over the quarters. This indicates that after accounting for all expenses, the company has been able to maintain a reasonable level of profitability, although there has been some variability in the margin percentage.
Overall, while the company has faced challenges in maintaining its gross and operating profit margins, it has been able to sustain a reasonable level of profitability as reflected in its pretax and net profit margins. Monitoring the trend in these ratios will be essential to assess the company's financial performance in the long term.
Return on investment
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -15.47% | -13.01% | -14.70% | -16.83% | -16.09% | -14.03% | -15.32% | -17.89% | -12.92% | -11.19% | -13.39% | -12.97% | -15.78% | -7.54% | -8.19% | -9.43% | -10.41% | -9.01% | -7.92% | -10.32% |
| Return on assets (ROA) | 6.90% | 5.76% | 6.23% | 7.08% | 6.69% | 5.45% | 5.78% | 6.53% | 4.68% | 3.97% | 4.64% | 4.50% | 5.33% | 4.54% | 5.03% | 5.86% | 6.30% | 5.83% | 5.02% | 6.28% |
| Return on total capital | 24.09% | 67.67% | 67.69% | 74.49% | 72.19% | 65.97% | 70.54% | 72.39% | 62.55% | 52.52% | 45.32% | 42.70% | 39.52% | 42.43% | 41.43% | 42.18% | 48.70% | 52.51% | 52.13% | 50.78% |
| Return on equity (ROE) | 82.51% | 79.96% | 82.36% | 100.56% | 97.23% | 88.27% | 105.34% | 117.50% | 91.43% | 68.25% | 54.34% | 50.40% | 45.83% | 43.56% | 42.07% | 42.80% | 42.88% | 46.09% | 45.92% | 44.21% |
Automatic Data Processing Inc's profitability ratios show a mixed performance over the analyzed periods. The Operating Return on Assets (Operating ROA) has been negative, indicating the company's operating income generated from its assets has been insufficient to cover operating expenses. However, the Return on Assets (ROA) has been positive, reflecting that the company has generated profit from its assets on a net basis.
The Return on Total Capital has shown significant fluctuations, reaching a peak of 74.49% in the third quarter of 2023. This ratio indicates how effectively the company is using its total capital to generate profits.
The Return on Equity (ROE) has also fluctuated, with the highest being 117.50% in the third quarter of 2022. This ratio shows how efficiently the company is generating profits from the shareholders' equity.
Overall, while the company has shown positive returns on assets and equity, its operating efficiency, as indicated by the Operating ROA, has been a concern with consistently negative figures. It would be essential for the company to focus on improving its operational efficiency to enhance overall profitability.
See also:
Automatic Data Processing Inc Profitability Ratios (Quarterly Data)