Automatic Data Processing Inc (ADP)

Return on total capital

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,815,800	5,154,600	4,947,900	4,814,300	4,691,100	4,408,600	4,214,600	4,028,000	3,886,100	3,770,500	3,641,900	3,559,900	3,420,900	3,253,300	3,270,300	3,290,900	3,289,600	3,409,900	3,319,400	3,231,900
Long-term debt	US$ in thousands	2,991,300	2,990,700	2,990,200	2,989,800	2,989,000	2,988,600	2,988,100	2,987,600	2,987,100	2,986,600	2,986,100	2,985,500	2,985,000	1,994,300	1,994,100	1,993,900	1,002,800	1,002,800	1,003,000	1,003,400
Total stockholders’ equity	US$ in thousands	4,547,600	4,626,700	4,319,600	3,472,800	3,509,100	3,693,800	2,986,700	2,576,500	3,225,300	4,192,900	5,049,600	5,350,700	5,670,100	5,673,900	5,900,000	5,808,900	5,752,200	5,490,700	5,364,400	5,360,700
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%

June 30, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,815,800K ÷ ($2,991,300K + $4,547,600K)
= 24.09%

The return on total capital for Automatic Data Processing Inc has shown fluctuations over the past few quarters. In the most recent quarter, as of June 30, 2024, the return on total capital was 24.09%, marking a decline from the previous quarter but still relatively healthy.

Looking at the trend over the past few quarters, the return on total capital has generally been on an upward trajectory since the beginning of 2021. The company experienced a significant increase in return on total capital in the second half of 2023, reaching highs of around 74.49% in September 2023.

Despite some variability in the ratios, the return on total capital has generally been at robust levels, consistently exceeding 40% over the last few quarters. This indicates that the company has been generating strong returns in relation to the total capital invested in its operations.

Overall, the trend in the return on total capital for Automatic Data Processing Inc suggests that the company has been effectively utilizing its capital to generate returns for its shareholders, although there have been some fluctuations in performance over the quarters.