Automatic Data Processing Inc (ADP)

Debt-to-equity ratio

		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
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
Debt-to-equity ratio		0.66	0.65	0.69	0.86	0.85	0.81	1.00	1.16	0.93	0.71	0.59	0.56	0.53	0.35	0.34	0.34	0.17	0.18	0.19	0.19

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 of Automatic Data Processing Inc has displayed fluctuations over the past several quarters. The ratio was relatively stable around the mid to high 0.6s and low 0.7s from December 2020 to March 2022. However, there was a notable increase in the ratio to 1.00 in December 2022, which continued to rise to a peak of 1.16 in September 2022.

This increase in the debt-to-equity ratio suggests that the company had taken on more debt relative to its equity during that period. High debt levels compared to equity can indicate higher financial risk and potential difficulties in meeting debt obligations.

Subsequently, from December 2022 to September 2023, there was a decreasing trend in the ratio, indicating a reduction in debt relative to equity. However, the ratio remained relatively high during this period, staying above 0.80.

In the most recent quarter, the debt-to-equity ratio improved to 0.66, suggesting a decrease in financial leverage and a stronger equity position compared to debt. It is essential for investors and stakeholders to monitor this ratio over time to assess the company's capital structure and financial health.