Analysis of Geographic Areas
Automatic Data Processing Inc. operates in 4 regions: United States; Europe; Canada; and Other.
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Area Asset Turnover
Automatic Data Processing Inc., asset turnover by geographic area
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Europe | ||||||
| Canada | ||||||
| Other |
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
The analysis of the annual geographic area asset turnover ratios reveals distinct trends and variations across different regions over the examined periods.
- United States
- The asset turnover ratio in the United States experienced a general increase from 0.25 in mid-2016 to 0.38 by mid-2020, indicating improving efficiency in using assets to generate revenue within this region. However, the ratio declined to 0.31 by mid-2021, suggesting a decrease in efficiency in the most recent period observed.
- Europe
- Europe showed relatively stable asset turnover ratios, fluctuating mildly between 0.44 and 0.57 during the period. The ratio dipped slightly in 2019 but recovered afterward, peaking at 0.57 in mid-2020 and then slightly declining to 0.54 by mid-2021. This stability with moderate variation indicates consistent asset utilization across the years.
- Canada
- Canada exhibited a modest variation in asset turnover ratios, starting at 0.15 in 2016 and reaching a peak of 0.17 in 2019. Afterwards, it declined to 0.10 by 2021, marking the lowest value in the observed timeframe and indicating a notable reduction in asset efficiency in recent years.
- Other Regions
- The "Other" category displayed a significant declining trend, with asset turnover ratios falling progressively from a high of 0.97 in 2016 to 0.33 in 2021. This continuous drop suggests a substantial decrease in the efficiency of asset utilization in these territories, which may warrant further investigation.
In summary, while most regions showed some resilience or growth in asset turnover throughout the analyzed period, the "Other" category experienced a marked decline. The United States and Canada regions reflected decreased efficiency in the latest year, and Europe maintained comparatively stable ratios with minor fluctuations. These patterns underscore the importance of regional strategies and possibly distinct market or operational conditions affecting asset turnover performance.
Area Asset Turnover: United States
Automatic Data Processing Inc.; United States; area asset turnover calculation
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Assets | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
1 2021 Calculation
Area asset turnover = Revenues ÷ Assets
= ÷ =
- Revenues
- Revenues steadily increased over the observed period from June 30, 2016, to June 30, 2021. Starting at 9,870,000 thousand US dollars, revenues grew consistently each year, reaching 13,081,700 thousand US dollars by mid-2021. This reflects a positive growth trajectory, with the annual increases indicating continual expansion in the company's sales within the geographic area under analysis.
- Assets
- The asset base exhibited notable fluctuations during the same period. Initially, assets decreased from 39,194,200 thousand US dollars in mid-2016 to a low of approximately 32,221,000 thousand US dollars in mid-2018. Subsequently, assets rose to 36,508,300 thousand US dollars by mid-2019, decreased again in mid-2020, and then experienced a significant increase to 42,137,100 thousand US dollars by June 30, 2021. These variations suggest possible changes in investment levels, asset management strategies, or operational adjustments over time.
- Area Asset Turnover Ratio
- The area asset turnover ratio showed variability throughout the period. Starting at 0.25 in 2016, the ratio improved to a peak of 0.38 in mid-2020, indicating that revenue generation per unit of asset was most efficient at that point. However, it declined to 0.31 by mid-2021, signaling a reduction in asset utilization effectiveness despite higher absolute revenues and assets. This trend points to possible diminishing returns on asset investments or changes in asset composition impacting efficiency.
- Overall Observations
- Over the five-year span, revenues demonstrated consistent growth, whereas assets underwent fluctuations with a notable rebound in the final year reported. The asset turnover ratio's peak and subsequent decline suggest changing dynamics in how effectively assets are employed to generate revenues within the United States geographic area. The combination of growing revenues and volatile asset levels highlights the importance of continuous monitoring of asset utilization to sustain profitability and operational efficiency.
Area Asset Turnover: Europe
Automatic Data Processing Inc.; Europe; area asset turnover calculation
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Assets | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
1 2021 Calculation
Area asset turnover = Revenues ÷ Assets
= ÷ =
- Revenue Trends
- The revenues for the Europe geographic area showed a generally upward trend from June 30, 2016, to June 30, 2021. Starting at 1,063,700 thousand US dollars in 2016, revenues increased to 1,087,000 thousand US dollars in 2017 and further to 1,245,900 thousand US dollars in 2018. There was a slight decline in 2019 and 2020, with revenues recorded at 1,236,800 and 1,236,300 thousand US dollars, respectively, before rising again to 1,307,900 thousand US dollars in 2021. Overall, the revenues increased by approximately 22.9% over the five-year period.
- Asset Trends
- The assets associated with the Europe geographic area experienced fluctuations over the period. The asset base grew from 2,064,300 thousand US dollars in 2016 to a peak of 2,807,900 thousand US dollars in 2019. This was followed by a notable decrease to 2,162,700 thousand US dollars in 2020 before rising again to 2,425,100 thousand US dollars in 2021. This indicates some volatility in asset levels, with a temporary reduction in 2020.
- Area Asset Turnover Analysis
- The area asset turnover ratio, which measures the efficiency in using assets to generate revenue, showed variability throughout the period. The ratio started at 0.52 in 2016, then declined to 0.48 in 2017, suggesting reduced efficiency that year. It improved to 0.54 in 2018 but dropped again to 0.44 in 2019. A significant rebound occurred in 2020, where the ratio reached 0.57, representing the highest efficiency across the observed years, followed by a slight decrease to 0.54 in 2021. This pattern indicates fluctuating asset utilization effectiveness, with the best performance occurring during a year of reduced asset base in 2020.
- Overall Insights
- The data reflects a positive revenue growth trend despite fluctuations in assets and asset turnover efficiency. The dip in assets and the spike in asset turnover in 2020 may imply asset optimization or divestment activities leading to improved asset use efficiency. The subsequent recovery in assets in 2021 with a stable turnover ratio suggests balanced asset management and steady revenue generation capacity towards the end of the period.
Area Asset Turnover: Canada
Automatic Data Processing Inc.; Canada; area asset turnover calculation
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Assets | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
1 2021 Calculation
Area asset turnover = Revenues ÷ Assets
= ÷ =
- Revenue Trends
- The revenues demonstrate a generally upward trend over the analyzed period. Starting at 284,100 thousand US dollars in 2016, revenues increased steadily each year, reaching 337,300 thousand US dollars by 2021. The growth is more pronounced between 2017 and 2018, and although the rate of increase slows down somewhat in subsequent years, the overall trajectory remains positive.
- Asset Trends
- Assets have shown considerable fluctuations with a significant increase towards the later years. From 1,949,400 thousand US dollars in 2016, assets slightly increased in 2017 but experienced a minor decline in 2018 and 2019. However, a substantial rise occurred in 2020 and 2021, with the asset base growing to 3,360,500 thousand US dollars by 2021, reflecting sizable investment or growth in asset holdings during the last two years.
- Area Asset Turnover Ratio
- The area asset turnover ratio, which measures the efficiency of asset use to generate revenues, shows a declining trend over the period. It started at 0.15 in 2016, dipped slightly in 2017, then increased briefly to 0.17 in 2019. However, this ratio fell sharply afterward, reaching 0.10 in 2021. This indicates that despite the increase in revenues, asset efficiency decreased, likely due to the rapid increase in asset base outpacing revenue growth in the later years.
- Overall Insights
- The data reflects growing revenues aligned with substantial asset growth, especially from 2019 onwards. The declining asset turnover ratio suggests that the company's investment in assets is not generating proportional revenue increases in the latter years. This could imply potential inefficiencies or a strategic accumulation of assets anticipating future revenue growth.
Area Asset Turnover: Other
Automatic Data Processing Inc.; Other; area asset turnover calculation
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Assets | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
1 2021 Calculation
Area asset turnover = Revenues ÷ Assets
= ÷ =
- Revenues
- The revenues exhibited a fluctuating trend over the examined periods. Starting at $450 million in mid-2016, revenues experienced a moderate increase to approximately $465.3 million by mid-2017. Subsequently, there was a sharp decline to around $271.4 million in mid-2018. After this significant drop, revenues showed slight recovery and stabilization, reaching $284.2 million in mid-2019, followed by a small decline to $283.6 million in mid-2020 and further to $278.5 million in mid-2021. Overall, revenues decreased notably from the 2016 level by the end of the period.
- Assets
- The asset base displayed a consistent and substantial upward trend throughout the period. Beginning at $462.1 million in mid-2016, assets increased steadily each year, reaching $508.6 million in 2017, $532.8 million in 2018, and $621 million in 2019. This growth continued through 2020 to $676.5 million and culminated with a substantial rise to $849.8 million by mid-2021, reflecting significant investments or asset accumulation over time.
- Area Asset Turnover Ratio
- The area asset turnover ratio demonstrated a clear downward trend, indicating declining efficiency in generating revenues from assets in this geographic segment. The ratio started at 0.97 in mid-2016, suggesting nearly one dollar of revenue generated per dollar of assets. This efficiency dropped slightly to 0.91 in 2017, then declined sharply to 0.51 in 2018 and continued to decrease to 0.46 in 2019. The trend persisted with further decreases to 0.42 in 2020 and ultimately 0.33 in 2021. This sustained reduction implies that as assets increased, revenue generation did not keep pace, leading to diminishing returns on asset investments in this area.
- Summary Insights
- While assets in the geographic area expanded considerably over the six-year period, the corresponding revenues declined from their earlier levels and stabilized at a lower range. This diverging pattern yielded a consistent decline in asset turnover ratio, signaling reduced operational efficiency or potentially increased capital intensity without proportional revenue gains. These trends suggest strategic considerations may be necessary to optimize asset utilization and improve revenue performance in this segment.
Revenues
Automatic Data Processing Inc., revenues by geographic area
US$ in thousands
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Europe | ||||||
| Canada | ||||||
| Other | ||||||
| Total |
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
The analysis of the annual geographic area revenues reveals distinct trends across different regions over the period from June 30, 2016, to June 30, 2021.
- United States
- The United States exhibits a consistent upward trajectory in revenue. Starting at $9,870,000 thousand in 2016, revenues increased steadily each year, reaching $13,081,700 thousand by 2021. This growth reflects a robust and expanding market presence in the country, with an overall increase of approximately 32.5% over the five-year span.
- Europe
- European revenues demonstrate moderate growth with some fluctuations. Beginning at $1,063,700 thousand in 2016, revenues climbed to $1,245,900 thousand in 2018, followed by a slight decrease to $1,236,300 thousand in 2020. Revenues then recovered modestly to $1,307,900 thousand in 2021. Overall, the region shows stability with a slow-growing trend and some volatility in the middle periods.
- Canada
- Canada shows a steady but slow growth trend over the time frame. Revenues increased from $284,100 thousand in 2016 to $337,300 thousand in 2021. The growth rate is gradual and consistent, indicating a stable market position without significant fluctuations.
- Other
- The "Other" geographic category reflects notable volatility and an overall declining trend. Revenues started at $450,000 thousand in 2016 but dropped sharply to $271,400 thousand in 2018. Subsequently, revenue levels stabilized around the $280,000 thousand mark through 2021, with a slight downward trend evident in the final year. This suggests challenges in regions outside the primary markets noted above.
- Total
- Total revenues increased steadily from $11,667,800 thousand in 2016 to $15,005,400 thousand in 2021, representing an overall growth of approximately 28.6%. This aggregate increase primarily reflects strong performance in the United States market, supplemented by moderate growth in Europe and Canada, while the "Other" category's decline marginally offsets total gains.
Assets
Automatic Data Processing Inc., assets by geographic area
US$ in thousands
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Europe | ||||||
| Canada | ||||||
| Other | ||||||
| Total |
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
The data reveals the distribution and changes in assets across various geographic areas over a six-year period ending June 30, 2021.
- United States
- The asset base in the United States experienced fluctuations throughout the period. It started at approximately $39.2 billion in 2016, decreased notably to around $32.4 billion in 2017, and remained relatively stable in 2018. A rebound occurred in 2019 with an increase to about $36.5 billion, followed by a slight decline in 2020 to roughly $33.9 billion. The asset value then rose sharply in 2021 to approximately $42.1 billion, marking the highest value in the period.
- Europe
- Assets in Europe showed moderate growth with some volatility. Starting at about $2.06 billion in 2016, assets increased steadily until 2019, reaching nearly $2.81 billion. However, there was a decline in 2020 to approximately $2.16 billion, followed by a partial recovery in 2021 to $2.43 billion. Overall, the pattern suggests a generally upward trend with a noteworthy dip in 2020.
- Canada
- Canadian assets showed a relatively stable level initially, starting at roughly $1.95 billion in 2016. Minor fluctuations were observed through 2019, with a slight decrease in 2019 to about $1.95 billion. However, there was a significant increase in 2020 to approximately $2.44 billion and a further rise in 2021 to around $3.36 billion, indicating robust growth in the latter years.
- Other Regions
- Assets classified under 'Other' regions displayed consistent growth throughout the period. Beginning at about $462 million in 2016, the asset value steadily increased each year, reaching approximately $850 million by 2021. This reflects a continuous expansion in asset allocation outside the primary regions mentioned.
- Total Assets
- Total assets exhibited variability over the six years. Starting at approximately $43.7 billion in 2016, total assets declined to about $37.2 billion in 2017 and remained nearly flat in 2018. The total jumped to around $41.9 billion in 2019, dropped to roughly $39.2 billion in 2020, and then surged to an all-time high of approximately $48.8 billion in 2021. This overall trend indicates periods of contraction followed by significant growth, particularly in the most recent year.