Paychex Inc (PAYX)
Return on equity (ROE)
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 1,657,300 | 1,690,400 | 1,557,300 | 1,392,800 | 1,097,500 |
| Total stockholders’ equity | US$ in thousands | 4,128,000 | 3,801,000 | 3,493,200 | 3,085,200 | 2,948,000 |
| ROE | 40.15% | 44.47% | 44.58% | 45.14% | 37.23% |
May 31, 2025 calculation
ROE = Net income ÷ Total stockholders’ equity
= $1,657,300K ÷ $4,128,000K
= 40.15%
The analysis of Paychex Inc.'s return on equity (ROE) over the specified period reveals a generally strong and stable profitability in relation to shareholders' equity. As of May 31, 2021, the ROE stood at 37.23%, indicating a solid return on equity investment. This figure increased markedly in the subsequent year, reaching 45.14% by May 31, 2022, demonstrating an improvement in efficiency at generating profit from shareholders' equity.
While the ROE experienced a slight decline in the following year to 44.58% as of May 31, 2023, the value remained high, reflecting continued effective utilization of equity capital. The subsequent year, May 31, 2024, showed a marginal decrease to 44.47%, maintaining a high level of profitability with minor fluctuation. In the most recent period, May 31, 2025, the ROE decreased further to 40.15%, indicating some decline in profitability relative to equity but still signifying a robust level of return compared to many industry peers.
Overall, Paychex Inc. has demonstrated a consistent ability to generate strong returns on shareholders' equity over the analyzed period. The fluctuations observed suggest periods of both growth and stabilization, with the ROE maintaining a position well above typical market averages. The recent slight decline may reflect internal or external factors impacting profitability or equity dynamics but does not significantly diminish the company's overall effective management and profitable operations over this timeframe.