Paychex Inc (PAYX)
Return on equity (ROE)
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 1,657,300 | 1,740,000 | 1,719,300 | 1,698,600 | 1,690,400 | 1,660,900 | 1,629,700 | 1,597,300 | 1,557,300 | 1,503,300 | 1,466,600 | 1,438,400 | 1,392,800 | 1,359,400 | 1,279,200 | 1,219,500 | 1,097,500 | 1,055,200 | 1,059,200 | 1,045,500 |
| Total stockholders’ equity | US$ in thousands | 4,128,000 | 4,116,600 | 3,925,700 | 3,850,400 | 3,801,000 | 3,747,100 | 3,524,400 | 3,587,800 | 3,493,200 | 3,401,100 | 3,205,300 | 3,137,400 | 3,085,200 | 3,286,000 | 3,119,800 | 3,043,500 | 2,948,000 | 2,976,400 | 2,889,700 | 2,778,600 |
| 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% |
May 31, 2025 calculation
ROE = Net income (ttm) ÷ 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 high and stable profitability measure, indicative of effective management and solid financial performance. The ROE was approximately 37.63% as of August 31, 2020, and experienced a gradual decline to around 35.45% by February 28, 2021. Despite this initial decline, the ROE exhibited an upward trend commencing in late 2020, reaching a peak of approximately 45.85% in August 2022. This period of growth reflects increasing profitability relative to shareholders' equity, potentially driven by improved operating efficiency, revenue growth, or favorable market conditions.
Throughout 2022 and into 2023, the ROE remained at elevated levels, fluctuating slightly but generally maintaining above 44%. The highest recorded value within this timeframe was approximately 45.85% in August 2022, suggesting strong return generation capabilities. A slight moderation in ROE was observed afterward, with values around 44% to 46% through late 2023, indicating sustained profitability levels.
Projected data extending into 2024 and 2025 show a gradual decline in ROE, descending from around 44% in late 2024 to approximately 40% by mid-2025. This downward trend may suggest a reduction in profitability or an increase in shareholders’ equity that is not offset proportionally by earnings growth. Nonetheless, even at these lower levels, the ROE remains relatively high, emphasizing Paychex’s ongoing ability to generate substantial returns for shareholders.
Overall, the ROE pattern demonstrates a period of increasing profitability through 2021 and 2022, followed by stable yet slightly declining levels into 2024 and 2025. The sustained high ROE figures over the examined period underscore a strong financial position and effective utilization of equity capital, though the recent decreasing trend warrants attention for potential shifts in operational or market conditions.