Automatic Data Processing Inc (ADP)

Return on equity (ROE)

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Net income	US$ in thousands	4,079,700	3,752,000	3,412,000	2,948,900	2,598,500
Total stockholders’ equity	US$ in thousands	6,188,000	4,547,600	3,509,100	3,225,300	5,670,100
ROE		65.93%	82.51%	97.23%	91.43%	45.83%

June 30, 2025 calculation

ROE = Net income ÷ Total stockholders’ equity
= $4,079,700K ÷ $6,188,000K
= 65.93%

The analysis of Automatic Data Processing Inc.'s return on equity (ROE) over the specified periods reveals notable variability and an overall upward trend followed by a decline. As of June 30, 2021, the company's ROE was 45.83%, indicating a strong ability to generate profit relative to shareholders' equity. This figure significantly increased to 91.43% by June 30, 2022, nearly doubling the previous year's performance, which suggests an exceptionally efficient use of equity capital during that period.

The upward momentum continued into June 30, 2023, with the ROE reaching 97.23%, marking the highest point within the observed timeframe. Such an increase could be attributed to a combination of factors, including improved profitability, effective cost management, or strategic initiatives that enhanced shareholder value.

Following this peak, a decline is apparent. By June 30, 2024, the ROE decreased to 82.51%, reflecting a reduction in profitability or efficiency, though it remains substantially high relative to earlier periods. The downward trend persisted into June 30, 2025, with the ROE dropping further to 65.93%. While this indicates a reduction from the peak levels, the company's ROE continues to demonstrate a strong capacity to generate returns on shareholders’ equity.

Overall, the data suggests that Automatic Data Processing Inc. experienced a period of exceptional profitability and efficiency from 2021 through 2023, with a subsequent moderation in ROE in the following years. The high ROE figures in 2022 and 2023 may reflect favorable market conditions, operational improvements, or one-time gains, whereas the decline thereafter could be associated with increasing competition, operational challenges, or strategic shifts. Despite the reduction, the company's ROE remains robust, signifying sustained profitability and efficient management.