Automatic Data Processing Inc (ADP)

Financial leverage 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
Total assets	US$ in thousands	54,362,700	64,181,600	57,069,400	49,323,600	50,971,000	59,881,800	54,453,000	46,364,700	63,068,200	72,068,100	59,102,600	59,987,200	48,772,500	54,407,700	49,325,900	42,390,100	39,165,500	43,383,400	49,059,400	37,714,700
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
Financial leverage ratio		11.95	13.87	13.21	14.20	14.53	16.21	18.23	18.00	19.55	17.19	11.70	11.21	8.60	9.59	8.36	7.30	6.81	7.90	9.15	7.04

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $54,362,700K ÷ $4,547,600K
= 11.95

The financial leverage ratio of Automatic Data Processing Inc has shown fluctuations over the past few years, ranging from a low of 6.81 to a high of 19.55. The trend indicates some variability and potential volatility in the company's capital structure and debt levels.

In more recent periods, the financial leverage ratio appears to have increased, reaching 13.87 in the most recent quarter. This upward trend suggests that the company may be relying more on debt financing to support its operations or investments, which could pose risks in terms of financial stability and interest rate exposure.

It is important for stakeholders to monitor changes in the financial leverage ratio closely, as a higher ratio typically indicates higher financial risk. This could impact the company's ability to meet its financial obligations or take advantage of growth opportunities in the future. Furthermore, an escalating trend in the financial leverage ratio may also raise concerns among investors and creditors about the company's financial health and sustainability.