Stock Analysis on Net

Automatic Data Processing Inc. (NASDAQ:ADP)

This company has been moved to the archive! The financial data has not been updated since April 29, 2022.

Analysis of Solvency Ratios

Microsoft Excel

Solvency Ratios (Summary)

Automatic Data Processing Inc., solvency ratios

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Debt Ratios
Debt to equity 0.53 0.35 0.42 0.58 0.50 0.45
Debt to equity (including operating lease liability) 0.61 0.43 0.42 0.58 0.50 0.45
Debt to capital 0.35 0.26 0.30 0.37 0.33 0.31
Debt to capital (including operating lease liability) 0.38 0.30 0.30 0.37 0.33 0.31
Debt to assets 0.06 0.05 0.05 0.05 0.05 0.05
Debt to assets (including operating lease liability) 0.07 0.06 0.05 0.05 0.05 0.05
Financial leverage 8.60 6.81 7.76 10.72 9.35 9.74
Coverage Ratios
Interest coverage 57.30 30.72 24.14 22.14 32.64 40.76
Fixed charge coverage 15.85 12.22 8.51 7.43 9.05 7.82

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).

Solvency ratio Description The company
Debt to equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Automatic Data Processing Inc. debt to equity ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Debt to equity ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. Automatic Data Processing Inc. debt to equity ratio (including operating lease liability) deteriorated from 2019 to 2020 and from 2020 to 2021.
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Automatic Data Processing Inc. debt to capital ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Debt to capital ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. Automatic Data Processing Inc. debt to capital ratio (including operating lease liability) deteriorated from 2019 to 2020 and from 2020 to 2021.
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. Automatic Data Processing Inc. debt to assets ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Debt to assets ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. Automatic Data Processing Inc. debt to assets ratio (including operating lease liability) deteriorated from 2019 to 2020 and from 2020 to 2021.
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Automatic Data Processing Inc. financial leverage ratio decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Automatic Data Processing Inc. interest coverage ratio improved from 2019 to 2020 and from 2020 to 2021.
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. Automatic Data Processing Inc. fixed charge coverage ratio improved from 2019 to 2020 and from 2020 to 2021.

Debt to Equity

Automatic Data Processing Inc., debt to equity calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Obligations under reverse repurchase agreements 23,500 13,600 262,000
Short-term debt 1,001,800
Long-term debt 2,985,000 1,002,800 2,002,200 2,002,400 2,002,400 2,007,700
Total debt 3,008,500 2,018,200 2,264,200 2,002,400 2,002,400 2,007,700
 
Stockholders’ equity 5,670,100 5,752,200 5,399,900 3,459,600 3,977,000 4,481,600
Solvency Ratio
Debt to equity1 0.53 0.35 0.42 0.58 0.50 0.45
Benchmarks
Debt to Equity, Competitors2
Accenture PLC 0.00 0.00 0.00
Adobe Inc. 0.28 0.31 0.39 0.44
Autodesk Inc. 1.70
Cadence Design Systems Inc. 0.13 0.14 0.16
CrowdStrike Holdings Inc. 0.85 0.00
International Business Machines Corp. 2.74 2.99 3.02
Intuit Inc. 0.21 0.66 0.12
Microsoft Corp. 0.50 0.62 0.77
Oracle Corp. 16.08 5.93 2.58
Palo Alto Networks Inc. 5.08 2.80 0.90
Salesforce Inc. 0.07 0.09 0.22
ServiceNow Inc. 0.43 0.58 0.33
Synopsys Inc. 0.02 0.03 0.03 0.13
Debt to Equity, Sector
Software & Services 0.84 0.96 1.06
Debt to Equity, Industry
Information Technology 0.76 0.87 0.87

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
Debt to equity = Total debt ÷ Stockholders’ equity
= 3,008,500 ÷ 5,670,100 = 0.53

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Automatic Data Processing Inc. debt to equity ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Debt to Equity (including Operating Lease Liability)

Automatic Data Processing Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Obligations under reverse repurchase agreements 23,500 13,600 262,000
Short-term debt 1,001,800
Long-term debt 2,985,000 1,002,800 2,002,200 2,002,400 2,002,400 2,007,700
Total debt 3,008,500 2,018,200 2,264,200 2,002,400 2,002,400 2,007,700
Current operating lease liability (recorded within Accrued expenses and other current liabilities) 94,700 95,500
Long-term operating lease liabilities 343,200 344,400
Total debt (including operating lease liability) 3,446,400 2,458,100 2,264,200 2,002,400 2,002,400 2,007,700
 
Stockholders’ equity 5,670,100 5,752,200 5,399,900 3,459,600 3,977,000 4,481,600
Solvency Ratio
Debt to equity (including operating lease liability)1 0.61 0.43 0.42 0.58 0.50 0.45
Benchmarks
Debt to Equity (including Operating Lease Liability), Competitors2
Accenture PLC 0.18 0.21 0.00
Adobe Inc. 0.32 0.35 0.39 0.44
Autodesk Inc. 2.18
Cadence Design Systems Inc. 0.18 0.20 0.22
CrowdStrike Holdings Inc. 0.89 0.00
International Business Machines Corp. 2.92 3.23 3.27
Intuit Inc. 0.25 0.71 0.12
Microsoft Corp. 0.58 0.69 0.84
Oracle Corp. 16.61 6.10 2.58
Palo Alto Networks Inc. 5.68 3.16 0.90
Salesforce Inc. 0.15 0.18 0.22
ServiceNow Inc. 0.60 0.75 0.53
Synopsys Inc. 0.13 0.14 0.03 0.13
Debt to Equity (including Operating Lease Liability), Sector
Software & Services 0.94 1.08 1.13
Debt to Equity (including Operating Lease Liability), Industry
Information Technology 0.83 0.94 0.90

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
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 3,446,400 ÷ 5,670,100 = 0.61

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to equity ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. Automatic Data Processing Inc. debt to equity ratio (including operating lease liability) deteriorated from 2019 to 2020 and from 2020 to 2021.

Debt to Capital

Automatic Data Processing Inc., debt to capital calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Obligations under reverse repurchase agreements 23,500 13,600 262,000
Short-term debt 1,001,800
Long-term debt 2,985,000 1,002,800 2,002,200 2,002,400 2,002,400 2,007,700
Total debt 3,008,500 2,018,200 2,264,200 2,002,400 2,002,400 2,007,700
Stockholders’ equity 5,670,100 5,752,200 5,399,900 3,459,600 3,977,000 4,481,600
Total capital 8,678,600 7,770,400 7,664,100 5,462,000 5,979,400 6,489,300
Solvency Ratio
Debt to capital1 0.35 0.26 0.30 0.37 0.33 0.31
Benchmarks
Debt to Capital, Competitors2
Accenture PLC 0.00 0.00 0.00
Adobe Inc. 0.22 0.24 0.28 0.31
Autodesk Inc. 0.63 1.07 1.11
Cadence Design Systems Inc. 0.11 0.12 0.14
CrowdStrike Holdings Inc. 0.46 0.00
International Business Machines Corp. 0.73 0.75 0.75
Intuit Inc. 0.17 0.40 0.10
Microsoft Corp. 0.33 0.38 0.43
Oracle Corp. 0.94 0.86 0.72
Palo Alto Networks Inc. 0.84 0.74 0.47
Salesforce Inc. 0.06 0.08 0.18
ServiceNow Inc. 0.30 0.37 0.25
Synopsys Inc. 0.02 0.03 0.03 0.12
Debt to Capital, Sector
Software & Services 0.46 0.49 0.51
Debt to Capital, Industry
Information Technology 0.43 0.47 0.46

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
Debt to capital = Total debt ÷ Total capital
= 3,008,500 ÷ 8,678,600 = 0.35

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Automatic Data Processing Inc. debt to capital ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Debt to Capital (including Operating Lease Liability)

Automatic Data Processing Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Obligations under reverse repurchase agreements 23,500 13,600 262,000
Short-term debt 1,001,800
Long-term debt 2,985,000 1,002,800 2,002,200 2,002,400 2,002,400 2,007,700
Total debt 3,008,500 2,018,200 2,264,200 2,002,400 2,002,400 2,007,700
Current operating lease liability (recorded within Accrued expenses and other current liabilities) 94,700 95,500
Long-term operating lease liabilities 343,200 344,400
Total debt (including operating lease liability) 3,446,400 2,458,100 2,264,200 2,002,400 2,002,400 2,007,700
Stockholders’ equity 5,670,100 5,752,200 5,399,900 3,459,600 3,977,000 4,481,600
Total capital (including operating lease liability) 9,116,500 8,210,300 7,664,100 5,462,000 5,979,400 6,489,300
Solvency Ratio
Debt to capital (including operating lease liability)1 0.38 0.30 0.30 0.37 0.33 0.31
Benchmarks
Debt to Capital (including Operating Lease Liability), Competitors2
Accenture PLC 0.15 0.17 0.00
Adobe Inc. 0.24 0.26 0.28 0.31
Autodesk Inc. 0.69 1.06 1.11
Cadence Design Systems Inc. 0.15 0.17 0.18
CrowdStrike Holdings Inc. 0.47 0.00
International Business Machines Corp. 0.74 0.76 0.77
Intuit Inc. 0.20 0.42 0.10
Microsoft Corp. 0.37 0.41 0.46
Oracle Corp. 0.94 0.86 0.72
Palo Alto Networks Inc. 0.85 0.76 0.47
Salesforce Inc. 0.13 0.16 0.18
ServiceNow Inc. 0.37 0.43 0.35
Synopsys Inc. 0.11 0.12 0.03 0.12
Debt to Capital (including Operating Lease Liability), Sector
Software & Services 0.49 0.52 0.53
Debt to Capital (including Operating Lease Liability), Industry
Information Technology 0.45 0.49 0.47

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
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 3,446,400 ÷ 9,116,500 = 0.38

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to capital ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. Automatic Data Processing Inc. debt to capital ratio (including operating lease liability) deteriorated from 2019 to 2020 and from 2020 to 2021.

Debt to Assets

Automatic Data Processing Inc., debt to assets calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Obligations under reverse repurchase agreements 23,500 13,600 262,000
Short-term debt 1,001,800
Long-term debt 2,985,000 1,002,800 2,002,200 2,002,400 2,002,400 2,007,700
Total debt 3,008,500 2,018,200 2,264,200 2,002,400 2,002,400 2,007,700
 
Total assets 48,772,500 39,165,500 41,887,700 37,088,700 37,180,000 43,670,000
Solvency Ratio
Debt to assets1 0.06 0.05 0.05 0.05 0.05 0.05
Benchmarks
Debt to Assets, Competitors2
Accenture PLC 0.00 0.00 0.00
Adobe Inc. 0.15 0.17 0.20 0.22
Autodesk Inc. 0.22 0.34 0.44
Cadence Design Systems Inc. 0.08 0.09 0.10
CrowdStrike Holdings Inc. 0.27 0.00
International Business Machines Corp. 0.39 0.39 0.41
Intuit Inc. 0.13 0.31 0.07
Microsoft Corp. 0.21 0.24 0.27
Oracle Corp. 0.64 0.62 0.52
Palo Alto Networks Inc. 0.31 0.34 0.22
Salesforce Inc. 0.04 0.06 0.11
ServiceNow Inc. 0.15 0.19 0.12
Synopsys Inc. 0.01 0.02 0.02 0.08
Debt to Assets, Sector
Software & Services 0.28 0.30 0.32
Debt to Assets, Industry
Information Technology 0.28 0.30 0.30

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
Debt to assets = Total debt ÷ Total assets
= 3,008,500 ÷ 48,772,500 = 0.06

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. Automatic Data Processing Inc. debt to assets ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Debt to Assets (including Operating Lease Liability)

Automatic Data Processing Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Obligations under reverse repurchase agreements 23,500 13,600 262,000
Short-term debt 1,001,800
Long-term debt 2,985,000 1,002,800 2,002,200 2,002,400 2,002,400 2,007,700
Total debt 3,008,500 2,018,200 2,264,200 2,002,400 2,002,400 2,007,700
Current operating lease liability (recorded within Accrued expenses and other current liabilities) 94,700 95,500
Long-term operating lease liabilities 343,200 344,400
Total debt (including operating lease liability) 3,446,400 2,458,100 2,264,200 2,002,400 2,002,400 2,007,700
 
Total assets 48,772,500 39,165,500 41,887,700 37,088,700 37,180,000 43,670,000
Solvency Ratio
Debt to assets (including operating lease liability)1 0.07 0.06 0.05 0.05 0.05 0.05
Benchmarks
Debt to Assets (including Operating Lease Liability), Competitors2
Accenture PLC 0.08 0.09 0.00
Adobe Inc. 0.17 0.19 0.20 0.22
Autodesk Inc. 0.29 0.41 0.44
Cadence Design Systems Inc. 0.11 0.13 0.14
CrowdStrike Holdings Inc. 0.29 0.00
International Business Machines Corp. 0.42 0.43 0.45
Intuit Inc. 0.16 0.33 0.07
Microsoft Corp. 0.25 0.27 0.30
Oracle Corp. 0.66 0.64 0.52
Palo Alto Networks Inc. 0.35 0.38 0.22
Salesforce Inc. 0.10 0.11 0.11
ServiceNow Inc. 0.21 0.24 0.19
Synopsys Inc. 0.08 0.08 0.02 0.08
Debt to Assets (including Operating Lease Liability), Sector
Software & Services 0.32 0.34 0.34
Debt to Assets (including Operating Lease Liability), Industry
Information Technology 0.31 0.33 0.31

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
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 3,446,400 ÷ 48,772,500 = 0.07

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to assets ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. Automatic Data Processing Inc. debt to assets ratio (including operating lease liability) deteriorated from 2019 to 2020 and from 2020 to 2021.

Financial Leverage

Automatic Data Processing Inc., financial leverage calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Total assets 48,772,500 39,165,500 41,887,700 37,088,700 37,180,000 43,670,000
Stockholders’ equity 5,670,100 5,752,200 5,399,900 3,459,600 3,977,000 4,481,600
Solvency Ratio
Financial leverage1 8.60 6.81 7.76 10.72 9.35 9.74
Benchmarks
Financial Leverage, Competitors2
Accenture PLC 2.21 2.18 2.07
Adobe Inc. 1.84 1.83 1.97 2.00
Autodesk Inc. 7.54
Cadence Design Systems Inc. 1.60 1.58 1.60
CrowdStrike Holdings Inc. 3.14 1.89
International Business Machines Corp. 6.98 7.57 7.30
Intuit Inc. 1.57 2.14 1.68
Microsoft Corp. 2.35 2.55 2.80
Oracle Corp. 25.03 9.56 4.99
Palo Alto Networks Inc. 16.14 8.23 4.16
Salesforce Inc. 1.60 1.63 1.97
ServiceNow Inc. 2.92 3.07 2.83
Synopsys Inc. 1.65 1.64 1.57 1.77
Financial Leverage, Sector
Software & Services 2.98 3.18 3.33
Financial Leverage, Industry
Information Technology 2.71 2.90 2.86

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
Financial leverage = Total assets ÷ Stockholders’ equity
= 48,772,500 ÷ 5,670,100 = 8.60

2 Click competitor name to see calculations.

Solvency ratio Description The company
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Automatic Data Processing Inc. financial leverage ratio decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Interest Coverage

Automatic Data Processing Inc., interest coverage calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Net earnings 2,598,500 2,466,500 2,292,800 1,620,800 1,733,400 1,492,500
Less: Net loss from discontinued operations (900)
Add: Income tax expense 762,700 716,100 712,800 550,300 797,700 741,300
Add: Interest expense 59,700 107,100 129,900 102,700 80,000 56,200
Earnings before interest and tax (EBIT) 3,420,900 3,289,700 3,135,500 2,273,800 2,611,100 2,290,900
Solvency Ratio
Interest coverage1 57.30 30.72 24.14 22.14 32.64 40.76
Benchmarks
Interest Coverage, Competitors2
Accenture PLC 131.46 205.84 273.26
Adobe Inc. 51.49 37.00 21.38 32.31
Autodesk Inc. 11.70 6.46 0.18
Cadence Design Systems Inc. 46.26 31.50 26.44
CrowdStrike Holdings Inc. -55.36 -315.25
International Business Machines Corp. 5.20 4.62 8.58
Intuit Inc. 89.14 158.00 126.40
Microsoft Corp. 31.31 21.47 17.27
Oracle Corp. 6.28 7.13 6.97
Palo Alto Networks Inc. -1.85 -1.61 0.11
Salesforce Inc. 24.28 7.42 8.80
ServiceNow Inc. 9.89 5.56 3.02
Synopsys Inc. 240.38 125.16 47.79 24.29
Interest Coverage, Sector
Software & Services 17.67 14.41 13.00
Interest Coverage, Industry
Information Technology 23.05 16.83 15.85

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
Interest coverage = EBIT ÷ Interest expense
= 3,420,900 ÷ 59,700 = 57.30

2 Click competitor name to see calculations.

Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Automatic Data Processing Inc. interest coverage ratio improved from 2019 to 2020 and from 2020 to 2021.

Fixed Charge Coverage

Automatic Data Processing Inc., fixed charge coverage calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016
Selected Financial Data (US$ in thousands)
Net earnings 2,598,500 2,466,500 2,292,800 1,620,800 1,733,400 1,492,500
Less: Net loss from discontinued operations (900)
Add: Income tax expense 762,700 716,100 712,800 550,300 797,700 741,300
Add: Interest expense 59,700 107,100 129,900 102,700 80,000 56,200
Earnings before interest and tax (EBIT) 3,420,900 3,289,700 3,135,500 2,273,800 2,611,100 2,290,900
Add: Operating lease cost 166,700 176,500 270,100 234,900 234,500 271,300
Earnings before fixed charges and tax 3,587,600 3,466,200 3,405,600 2,508,700 2,845,600 2,562,200
 
Interest expense 59,700 107,100 129,900 102,700 80,000 56,200
Operating lease cost 166,700 176,500 270,100 234,900 234,500 271,300
Fixed charges 226,400 283,600 400,000 337,600 314,500 327,500
Solvency Ratio
Fixed charge coverage1 15.85 12.22 8.51 7.43 9.05 7.82
Benchmarks
Fixed Charge Coverage, Competitors2
Accenture PLC 10.41 9.66 10.07
Adobe Inc. 25.59 18.77 10.78 13.34
Autodesk Inc. 4.58 3.09 0.62
Cadence Design Systems Inc. 13.77 11.46 9.95
CrowdStrike Holdings Inc. -6.40 -12.01
International Business Machines Corp. 3.13 2.62 4.41
Intuit Inc. 25.58 27.48 34.00
Microsoft Corp. 16.90 12.44 10.94
Oracle Corp. 5.17 5.68 5.50
Palo Alto Networks Inc. -1.09 -0.52 0.41
Salesforce Inc. 2.94 1.69 3.00
ServiceNow Inc. 2.95 2.29 1.69
Synopsys Inc. 9.29 7.46 6.30 4.98
Fixed Charge Coverage, Sector
Software & Services 9.38 7.64 7.52
Fixed Charge Coverage, Industry
Information Technology 13.49 10.22 10.45

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
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,587,600 ÷ 226,400 = 15.85

2 Click competitor name to see calculations.

Solvency ratio Description The company
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. Automatic Data Processing Inc. fixed charge coverage ratio improved from 2019 to 2020 and from 2020 to 2021.