Paychex Inc (PAYX)

Pretax margin

May 31, 2024 May 31, 2023 May 31, 2022 May 31, 2021 May 31, 2020
Earnings before tax but after interest (EBT) US$ in thousands 2,218,000 2,048,200 1,824,600 1,434,200 1,437,100
Revenue US$ in thousands 5,278,300 5,007,100 4,611,700 4,056,800 4,040,500
Pretax margin 42.02% 40.91% 39.56% 35.35% 35.57%

May 31, 2024 calculation

Pretax margin = EBT ÷ Revenue
= $2,218,000K ÷ $5,278,300K
= 42.02%

The pretax margin of Paychex Inc has shown a generally positive trend over the past five years, indicating the company's ability to efficiently generate profits before accounting for taxes. The pretax margin has steadily increased from 35.57% in 2020 to 42.02% in 2024, reflecting improving operational efficiency and cost management. This upward trend suggests that Paychex has been effectively controlling its operating expenses relative to its revenue, leading to higher levels of profitability at the pre-tax level. Overall, the consistent expansion of the pretax margin demonstrates the company's strength in maximizing earnings before tax deductions across multiple fiscal years.