Paychex Inc (PAYX)
Profitability ratios
Return on sales
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 72.35% | 72.03% | 71.80% | 71.77% | 71.97% | 71.73% | 71.54% | 71.26% | 70.98% | 70.68% | 70.47% | 70.54% | 70.59% | 70.82% | 70.26% | 69.66% | 68.66% | 68.37% | 68.32% | 68.28% |
| Operating profit margin | 39.62% | 41.52% | 41.28% | 41.13% | 41.19% | 41.16% | 40.89% | 40.77% | 40.60% | 40.10% | 39.97% | 39.98% | 39.91% | 40.04% | 39.37% | 38.49% | 36.01% | 35.67% | 35.43% | 35.05% |
| Pretax margin | 39.05% | 41.89% | 41.93% | 41.91% | 42.02% | 42.01% | 41.67% | 41.39% | 40.91% | 40.10% | 39.66% | 39.55% | 39.56% | 39.62% | 39.01% | 38.07% | 35.35% | 35.00% | 34.77% | 34.39% |
| Net profit margin | 29.74% | 31.99% | 32.02% | 31.98% | 32.03% | 31.86% | 31.62% | 31.40% | 31.10% | 30.54% | 30.45% | 30.38% | 30.20% | 30.23% | 29.53% | 28.98% | 27.05% | 26.76% | 26.66% | 26.26% |
Paychex Inc. exhibits a consistent and gradually improving profitability profile across multiple key financial ratios over the observed period. The gross profit margin demonstrates a steady upward trend, increasing from approximately 68.28% in August 2020 to approximately 72.35% by May 2025. This consistent growth indicates enhanced efficiency in core operations or effective management of direct costs, leading to improved profitability at the gross level.
Operating profit margins follow a similar positive trajectory, rising from 35.05% in August 2020 to roughly 39.62% in May 2025. The trend suggests that the company has been able to control operating expenses relative to its revenues, thereby enhancing operational efficiency and profitability before considering interest and taxes.
The pretax margins reflect a stronger margin expansion, rising from 34.39% to approximately 41.89% over the same period. This indicates improved overall profitability before tax obligations, possibly driven by better cost management or favorable revenue growth.
Net profit margins, which reflect the bottom-line profitability, show a steady increase from 26.26% in August 2020 to approximately 32.03% in May 2024, before experiencing a decline to about 29.74% by May 2025. The initial upward trend signifies effective control over all expenses, including taxes, resulting in higher profitability. The observed decline towards the end of the period may suggest a slight escalation in tax rates, changes in non-operating expenses, or other factors impacting net income.
Overall, Paychex Inc. exhibits a stable and improving profitability outlook across gross, operating, pretax, and net margins, with an emphasis on efficiency gains and margin expansion over the analyzed period. The recent slight decline in the net profit margin warrants further investigation but does not significantly alter the general positive profitability trend observed over time.
Return on investment
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.33% | 20.13% | 21.00% | 20.83% | 20.94% | 16.47% | 17.49% | 17.00% | 19.28% | 18.61% | 20.89% | 20.75% | 19.10% | 17.51% | 17.61% | 17.29% | 15.83% | 14.55% | 16.34% | 16.66% |
| Return on assets (ROA) | 10.01% | 15.51% | 16.29% | 16.19% | 16.28% | 12.75% | 13.52% | 13.09% | 14.77% | 14.18% | 15.92% | 15.76% | 14.46% | 13.22% | 13.20% | 13.02% | 11.89% | 10.92% | 12.29% | 12.48% |
| Return on total capital | 44.29% | 56.12% | 57.35% | 57.25% | 57.20% | 57.26% | 59.80% | 58.14% | 58.55% | 58.39% | 60.42% | 60.54% | 59.85% | 54.97% | 54.88% | 53.22% | 50.38% | 48.07% | 49.57% | 51.10% |
| Return on equity (ROE) | 40.15% | 42.27% | 43.80% | 44.11% | 44.47% | 44.32% | 46.24% | 44.52% | 44.58% | 44.20% | 45.76% | 45.85% | 45.14% | 41.37% | 41.00% | 40.07% | 37.23% | 35.45% | 36.65% | 37.63% |
The profitability ratios of Paychex Inc over the provided period demonstrate a generally positive trend, with fluctuations aligning with market conditions and internal performance. The operating return on assets (Operating ROA) exhibited notable growth from 16.66% as of August 31, 2020, peaking at 20.94% in May 2024 before experiencing a slight decline to 20.83% in August 2024, and thereafter stabilizing around 21.00% by November 2024. This indicates an improvement in operational efficiency relative to assets, suggesting enhanced core business profitability, although the ratio experienced some volatility.
The net return on assets (ROA) followed a similar trajectory, starting at 12.48% in August 2020, declining to approximately 10.92% in February 2021, and then gradually increasing to reach a recent high of 16.28% in May 2024. The decline observed in 2021 and early 2022 was offset by a steady upward trend from mid-2021 through 2024, reflecting better asset utilization and profitability generation from the company's total assets.
Return on total capital (ROTC) indicated sustained strong profitability based on capital employed, beginning at 51.10% in August 2020, and rising to a peak of nearly 60.54% in August 2022. Despite some fluctuations, the ROTC remained robust throughout the period, with values hovering around 57% in recent months. A decline is evident in the latest data, with ROTC falling to 44.29% in May 2025, potentially signaling increased capital costs or reduced efficiency.
Return on equity (ROE) displayed a consistent level of high profitability, starting at 37.63% in August 2020 and reaching a high of around 45.85% in August 2022. In subsequent periods, the ROE experienced slight declines, culminating at 40.15% in May 2025. The pattern suggests that Paychex maintained substantial profitability relative to shareholders’ equity, though margins have narrowed slightly in recent months.
Overall, the data imply that Paychex Inc maintained solid profitability across various metrics, with improvements evident from 2020 through mid-2024. Fluctuations in ratios reflect typical operational and market challenges but indicate a resilient profitability profile consistent with a stable and potentially efficient business operation framework.