Automatic Data Processing Inc (ADP)
Return on total capital
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 5,756,800 | 5,650,300 | 5,562,900 | 5,423,200 | 5,235,800 | 5,156,700 | 4,952,000 | 4,828,800 | 4,706,300 | 4,423,800 | 4,227,300 | 4,029,200 | 3,885,500 | 3,768,800 | 3,641,800 | 3,559,800 | 3,420,800 | 3,253,400 | 3,270,400 | 3,291,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 6,188,000 | 5,855,300 | 5,078,100 | 5,348,600 | 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 |
| Return on total capital | 93.03% | 96.50% | 109.55% | 101.39% | 115.13% | 111.46% | 114.64% | 139.05% | 134.12% | 119.76% | 141.54% | 156.38% | 120.47% | 89.89% | 72.12% | 66.53% | 60.33% | 57.34% | 55.43% | 56.65% |
June 30, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $5,756,800K ÷ ($—K + $6,188,000K)
= 93.03%
The analysis of Automatic Data Processing Inc.'s return on total capital (ROTC) over the period from September 2020 through June 2025 reveals notable fluctuations and a general upward trend followed by a subsequent stabilization. Initially, the ROTC was approximately 56.65% as of September 30, 2020, reflecting a robust efficiency in generating returns from the company's total capital base.
During the subsequent quarters, the ROTC experienced a slight decline but remained relatively stable until the end of 2021, with figures around 55.43% to 72.12%. The most significant change occurred starting in early 2022, when the ROTC surged sharply, reaching a peak of approximately 156.38% as of September 30, 2022. This indicates a substantial improvement in the company's ability to generate returns on its total capital, possibly driven by operational efficiencies, strategic initiatives, or favorable market conditions.
Following this peak, the ROTC demonstrated a downward correction but continued to remain at elevated levels relative to the earlier period, with a figure of approximately 114.64% as of December 31, 2023. The trend persisted into early 2024, with values around 111.46% in March 2024, and remained elevated through mid-2024 and into September 2024, where it was roughly 101.39%.
In the subsequent months, the ROTC exhibited a gradual decline, reaching around 93.03% by June 2025. Despite this decline, the current levels still indicate a high efficiency in capital utilization relative to the earlier years. The overall pattern suggests periods of significant growth and returns, followed by stabilization, with the company's ability to leverage its total capital remaining strong, albeit with some expected seasonal or operational adjustments over time.
In summary, Automatic Data Processing Inc. demonstrated a substantial increase in return on total capital from 2020 to 2022, reaching record levels, then entered a phase of stabilization with moderate declines but sustained high efficiency through the subsequent year and into mid-2025.
Peer comparison
Jun 30, 2025