Automatic Data Processing Inc (ADP)

Debt-to-equity ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
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
Debt-to-equity ratio		0.66	0.85	0.93	0.53	0.17

June 30, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $2,991,300K ÷ $4,547,600K
= 0.66

The debt-to-equity ratio for Automatic Data Processing Inc has fluctuated over the past five years, indicating changes in the company's capital structure.

In 2020, the ratio was relatively low at 0.17, suggesting a conservative level of debt compared to equity. However, there was a significant increase in the ratio in 2021 to 0.53, indicating a higher level of debt relative to equity.

Subsequently, there was a sharp increase in the ratio to 0.93 in 2022, reaching the highest level in the five-year period. This could signal a significant rise in debt compared to equity, potentially indicating increased financial leverage.

The ratio decreased in 2023 to 0.85, but it remained at a relatively elevated level compared to the earlier years. In the most recent year, 2024, the ratio further decreased to 0.66, implying a partial reduction in debt relative to equity.

Overall, the trend in the debt-to-equity ratio for Automatic Data Processing Inc reflects fluctuations in the company's financial leverage and capital structure over the five-year period, with notable increases and decreases observed. It would be important to further investigate the reasons behind these fluctuations and assess the implications for the company's financial health and risk profile.