Automatic Data Processing Inc (ADP)

Return on equity (ROE)

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Net income	US$ in thousands	3,752,000	3,412,000	2,948,900	2,598,500	2,466,500
Total stockholders’ equity	US$ in thousands	4,547,600	3,509,100	3,225,300	5,670,100	5,752,200
ROE		82.51%	97.23%	91.43%	45.83%	42.88%

June 30, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $3,752,000K ÷ $4,547,600K
= 82.51%

Automatic Data Processing Inc's return on equity (ROE) has demonstrated strong performance over the past five years, with a consistent upward trend. The ROE has increased from 42.88% in June 2020 to 82.51% in June 2024. This indicates that the company is effectively generating profit from shareholders' equity.

The substantial increase in ROE from 2020 to 2023 shows significant improvements in efficiency and profitability. Even though there was a slight decrease in ROE in 2024 compared to the previous year, the current ROE of 82.51% is still notably high.

This trend suggests that Automatic Data Processing Inc is effectively utilizing its shareholders' equity to generate profits and create value for investors. The high ROE indicates efficient management of the company's assets and effective capital allocation strategies. Overall, the increasing trend in ROE reflects positively on the company's financial performance and management efficiency.