Automatic Data Processing Inc (ADP)
Return on total capital
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -8,447,200 | 4,690,900 | 3,886,000 | 3,420,900 | 3,289,700 |
| Long-term debt | US$ in thousands | 2,991,300 | 2,989,000 | 2,987,100 | 2,985,000 | 1,002,800 |
| Total stockholders’ equity | US$ in thousands | 4,547,600 | 3,509,100 | 3,225,300 | 5,670,100 | 5,752,200 |
| Return on total capital | -112.05% | 72.19% | 62.55% | 39.52% | 48.70% |
June 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-8,447,200K ÷ ($2,991,300K + $4,547,600K)
= -112.05%
Automatic Data Processing Inc's return on total capital has fluctuated significantly over the past five years. In 2024, the company reported a negative return on total capital of -112.05%, indicating that its capital utilization led to a loss rather than a profit. This sharp decline from the previous year suggests a significant decrease in the company's ability to generate profits relative to its total capital.
In contrast, in 2023, the return on total capital was at a relatively high level of 72.19%, indicating efficient capital allocation and strong profit generation compared to the invested capital. This level of return was even higher in 2022 at 62.55%, demonstrating a consistently profitable performance.
The trend in return on total capital shows a notable increase from 2019 to 2021, with a peak in 2021 at 39.52%. However, the return declined slightly in 2024. Overall, while the company has demonstrated periods of strong capital efficiency and profit generation, the negative return in 2024 suggests a recent dip in performance that may require further investigation and strategic management.
Peer comparison
Jun 30, 2024