Paychex Inc (PAYX)
Profitability ratios
Return on sales
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 71.97% | 70.98% | 70.59% | 68.66% | 68.30% |
| Operating profit margin | 41.19% | 40.60% | 39.90% | 36.01% | 36.15% |
| Pretax margin | 42.02% | 40.91% | 39.56% | 35.35% | 35.57% |
| Net profit margin | 32.03% | 31.10% | 30.20% | 27.05% | 27.18% |
Paychex Inc has shown consistent improvement in its profitability ratios over the past five years. The gross profit margin has steadily increased from 68.30% in 2020 to 71.97% in 2024, indicating the company's ability to effectively manage production costs and generate higher margins on its services.
Similarly, the operating profit margin has shown a positive trend, reaching 41.19% in 2024 from 36.15% in 2020. This reflects the company's efficiency in controlling operating expenses and increasing profitability from its core business operations.
The pretax margin has also improved, with a notable increase from 35.57% in 2020 to 42.02% in 2024. This suggests that Paychex has been successful in optimizing its tax liabilities and generating higher earnings before taxes relative to its revenue.
Furthermore, the net profit margin has shown a consistent upward trajectory, climbing from 27.18% in 2020 to 32.03% in 2024. This indicates the company's ability to efficiently manage its bottom line, resulting in increased profitability for its shareholders.
Overall, Paychex Inc's profitability ratios demonstrate a positive and improving trend, reflecting the company's strong financial performance and effective management of its operations.
Return on investment
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 20.94% | 19.28% | 19.10% | 15.83% | 17.08% |
| Return on assets (ROA) | 16.28% | 14.77% | 14.46% | 11.89% | 12.84% |
| Return on total capital | 47.27% | 47.38% | 47.39% | 39.00% | 40.82% |
| Return on equity (ROE) | 44.47% | 44.58% | 45.14% | 37.23% | 39.48% |
Paychex Inc has demonstrated consistent profitability over the past five years as indicated by its profitability ratios. The Operating Return on Assets (Operating ROA) has shown a positive trend, increasing from 17.08% in 2020 to 20.94% in 2024. This indicates that the company is effectively generating operating income relative to its total assets.
Return on Assets (ROA) has also displayed a positive trend, rising from 12.84% in 2020 to 16.28% in 2024. This implies that Paychex is efficiently utilizing its assets to generate profits.
The Return on Total Capital has been impressive, consistently above 40% over the past five years, reaching 47.27% in 2024. This ratio indicates that the company generates significant returns for both equity and debt holders, reflecting a strong financial performance.
Return on Equity (ROE) has also shown a consistent upward trend, from 39.48% in 2020 to 44.47% in 2024, indicating that the company is effectively generating profits from shareholders' equity.
Overall, Paychex Inc's profitability ratios suggest a strong and consistent performance in generating profits relative to assets, capital, and equity, indicating efficient management and utilization of resources in delivering value to its stakeholders.