Automatic Data Processing Inc (ADP)

Return on total capital

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	5,756,000	5,238,100	4,695,300	3,890,400	3,420,900
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	6,188,000	4,547,600	3,509,100	3,225,300	5,670,100
Return on total capital		93.02%	115.18%	133.80%	120.62%	60.33%

June 30, 2025 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,756,000K ÷ ($—K + $6,188,000K)
= 93.02%

The Return on Total Capital (ROTC) for Automatic Data Processing Inc. has demonstrated a notable upward trend from June 30, 2021, through June 30, 2023. Specifically, the ROTC increased from 60.33% in 2021 to 120.62% in 2022, reflecting a significant improvement in the company's efficiency in generating profits from its total capital base. This surge indicates enhanced operational performance, better utilization of capital, or improved profit margins during this period.

Between June 30, 2022, and June 30, 2023, the ROTC continued to rise, reaching 133.80%, suggesting the company was able to leverage its capital effectively to generate higher returns, possibly through cost efficiencies, revenue growth, or strategic investments.

However, after peaking in 2023, the ROTC experienced a decline in subsequent years. As of June 30, 2024, it decreased to 115.18%, indicating some reduction in the company's ability to generate returns on its total capital, though it remained substantially higher than the 2021 levels. This decline continued into 2025, with the ROTC decreasing further to 93.02%, bringing the return closer to the initial levels observed in 2021.

Overall, the trend reflects a period of rapid growth and high efficiency for Automatic Data Processing Inc. during 2021 to 2023, followed by a moderation in return levels. The fluctuations may be attributed to changes in operational performance, market conditions, or strategic shifts impacting the company's profitability and capital efficiency in recent years.