Paychex Inc (PAYX)
Return on total capital
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 2,255,300 | 2,033,100 | 1,840,000 | 1,460,700 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,128,000 | 3,801,000 | 3,493,200 | 3,085,200 | 2,948,000 |
| Return on total capital | 0.00% | 59.33% | 58.20% | 59.64% | 49.55% |
May 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $4,128,000K)
= 0.00%
The data for Paychex Inc's Return on Total Capital (ROTC) over the period from May 2021 through May 2025 demonstrates notable fluctuations and trends. As of May 31, 2021, the ROTC stood at 49.55%, reflecting a robust utilization of total capital to generate earnings. This metric increased significantly year-over-year, reaching 59.64% by May 31, 2022, indicating improved operational efficiency and effective capital deployment.
In the subsequent year, the ROTC displayed a slight decline to 58.20% as of May 31, 2023, suggesting a modest reduction in the company's ability to leverage its total capital for profit generation. However, the level remained substantially high, maintaining the overall positive trend observed in the prior year.
By May 31, 2024, the ROTC saw a marginal increase again to 59.33%, surpassing the previous year's figure and reinforcing the company's strong performance in capital utilization. Despite this, the data for May 31, 2025, indicates a return to zero percent, which is an unusual deviation that may reflect data inconsistency, reporting updates, or a specific accounting change impacting the ROTC measurement.
Overall, the period exhibits a trend of high profitability relative to total capital, with marked increases from 2021 to 2022, minor fluctuations thereafter, and an abrupt zero in 2025 that warrants further clarification. These figures suggest that Paychex Inc has generally maintained a high level of efficiency in converting its total capital into earnings, though the sudden drop to zero may influence interpretations of recent operational performance.