Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Automatic Data Processing Inc., long-term (investment) activity ratios
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).
- Net fixed asset turnover
- The net fixed asset turnover ratio demonstrates a generally increasing trend from 17.03 in 2016 to 21.92 in 2021. This indicates improving efficiency in utilizing fixed assets to generate revenue over the observed period, with a minor dip in 2017 followed by consistent growth thereafter.
- Net fixed asset turnover including operating lease, right-of-use asset
- When adjusting for operating leases and right-of-use assets, the ratio shows a different pattern. It remains consistent with the standard net fixed asset turnover up to 2019 but then drops significantly in 2020 to 12.18 and slightly recovers to 13.09 in 2021. This substantial decrease suggests the impact of capitalizing leases under new accounting standards, altering asset base composition and efficiency metrics.
- Total asset turnover
- The total asset turnover ratio fluctuates within a narrow range between 0.27 and 0.37. It increases steadily from 0.27 in 2016 to 0.36 in 2018, followed by a slight decline in 2019 to 0.34, a peak in 2020 at 0.37, and then a drop to 0.31 in 2021. Overall, the ratio shows moderate variability without a clear upward or downward trend, indicating relatively stable asset utilization efficiency.
- Equity turnover
- Equity turnover shows notable volatility over the six years. It rises from 2.60 in 2016 to a peak of 3.85 in 2018, then sharply declines to 2.63 in 2019. Subsequent years show minor changes, with a low of 2.54 in 2020 and a slight recovery to 2.65 in 2021. This pattern highlights fluctuating efficiency in the use of shareholders' equity to generate sales, with a peak performance period around 2018 followed by a period of lower turnover.
Net Fixed Asset Turnover
Automatic Data Processing Inc., net fixed asset turnover calculation, comparison to benchmarks
| 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 | 15,005,400) | 14,589,800) | 14,175,200) | 13,325,800) | 12,379,800) | 11,667,800) | |
| Property, plant and equipment, net | 684,500) | 703,900) | 764,200) | 793,700) | 779,900) | 685,000) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover1 | 21.92 | 20.73 | 18.55 | 16.79 | 15.87 | 17.03 | |
| Benchmarks | |||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||
| Accenture PLC | 30.83 | 28.68 | 31.06 | — | — | — | |
| Adobe Inc. | 9.44 | 8.48 | 8.64 | — | — | — | |
| Cadence Design Systems Inc. | 9.77 | 8.62 | — | — | — | — | |
| CrowdStrike Holdings Inc. | 5.24 | 3.54 | — | — | — | — | |
| Fair Isaac Corp. | 47.17 | 27.89 | 21.88 | — | — | — | |
| International Business Machines Corp. | 10.07 | 7.33 | — | — | — | — | |
| Intuit Inc. | 12.35 | 10.46 | 8.70 | — | — | — | |
| Microsoft Corp. | 2.81 | 3.24 | 3.45 | — | — | — | |
| Oracle Corp. | 5.74 | 6.26 | — | — | — | — | |
| Palantir Technologies Inc. | 49.26 | 36.99 | — | — | — | — | |
| Palo Alto Networks Inc. | 13.37 | 9.79 | 9.80 | — | — | — | |
| Salesforce Inc. | 8.64 | 7.20 | — | — | — | — | |
| ServiceNow Inc. | 7.70 | 6.85 | — | — | — | — | |
| Synopsys Inc. | 8.90 | 7.62 | 7.82 | — | — | — | |
| Workday Inc. | 4.44 | 3.87 | — | — | — | — | |
| Net Fixed Asset Turnover, Sector | |||||||
| Software & Services | 4.73 | 5.15 | — | — | — | — | |
| Net Fixed Asset Turnover, Industry | |||||||
| Information Technology | 4.74 | 4.57 | — | — | — | — | |
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
Net fixed asset turnover = Revenues ÷ Property, plant and equipment, net
= 15,005,400 ÷ 684,500 = 21.92
2 Click competitor name to see calculations.
- Revenues
- Revenues demonstrated a consistent upward trend from 2016 to 2021. Starting at $11,667,800 thousand in 2016, revenues increased each year, reaching $15,005,400 thousand in 2021. The annual growth appears steady, reflecting approximately a 28.6% increase over the six-year period. This indicates sustained business growth and possibly expanding market presence or successful product/service offerings.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment showed fluctuations over the years. It increased from $685,000 thousand in 2016 to a peak of $793,700 thousand in 2018. Subsequently, the value declined steadily to $684,500 thousand by 2021, slightly below the 2016 level. This trend may suggest divestitures, asset depreciation, or potentially reduced capital expenditures during the later years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited a generally positive trend, improving from 17.03 in 2016 to 21.92 in 2021. This suggests increasing efficiency in the use of fixed assets to generate revenues. Despite the decreasing asset base after 2018, the ratio's rise implies that the company is generating more revenue per dollar of net fixed assets, reflecting enhanced operational productivity or better asset management.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Automatic Data Processing Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenues | 15,005,400) | 14,589,800) | 14,175,200) | 13,325,800) | 12,379,800) | 11,667,800) | |
| Property, plant and equipment, net | 684,500) | 703,900) | 764,200) | 793,700) | 779,900) | 685,000) | |
| Operating lease right-of-use asset | 462,200) | 493,700) | —) | —) | —) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 1,146,700) | 1,197,600) | 764,200) | 793,700) | 779,900) | 685,000) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 13.09 | 12.18 | 18.55 | 16.79 | 15.87 | 17.03 | |
| Benchmarks | |||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | |||||||
| Accenture PLC | 10.48 | 9.37 | 31.06 | — | — | — | |
| Adobe Inc. | 7.46 | 6.42 | 8.64 | — | — | — | |
| Cadence Design Systems Inc. | 6.85 | 6.04 | — | — | — | — | |
| CrowdStrike Holdings Inc. | 4.30 | 3.54 | — | — | — | — | |
| Fair Isaac Corp. | 17.51 | 12.44 | 21.88 | — | — | — | |
| International Business Machines Corp. | 6.43 | 5.00 | — | — | — | — | |
| Intuit Inc. | 8.30 | 8.00 | 8.70 | — | — | — | |
| Microsoft Corp. | 2.37 | 2.70 | 2.87 | — | — | — | |
| Oracle Corp. | 4.20 | 4.74 | — | — | — | — | |
| Palantir Technologies Inc. | 6.21 | 4.43 | — | — | — | — | |
| Palo Alto Networks Inc. | 7.32 | 5.62 | 9.80 | — | — | — | |
| Salesforce Inc. | 3.75 | 3.16 | — | — | — | — | |
| ServiceNow Inc. | 4.34 | 4.06 | — | — | — | — | |
| Synopsys Inc. | 4.35 | 3.88 | 7.82 | — | — | — | |
| Workday Inc. | 3.11 | 2.96 | — | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | |||||||
| Software & Services | 3.58 | 3.82 | — | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | |||||||
| Information Technology | 4.03 | 3.87 | — | — | — | — | |
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
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 15,005,400 ÷ 1,146,700 = 13.09
2 Click competitor name to see calculations.
- Revenues
- The revenues demonstrate a consistent upward trend over the six-year period. Starting at approximately $11.67 billion in mid-2016, they increased steadily each year, reaching around $15.01 billion by mid-2021. The growth rate appears to slow somewhat after 2019, indicating a deceleration in revenue expansion during the later years.
- Property, plant and equipment, net (including operating lease, right-of-use asset)
- The net value of property, plant, and equipment exhibits moderate fluctuation across the years. Initially rising from $685 million in 2016 to about $794 million in 2018, it then experiences a slight decline in 2019. Following this, there is a pronounced increase in 2020 to roughly $1.20 billion, which marginally decreases in 2021. This significant increase in 2020 suggests a substantial investment or revaluation occurred during that period.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio fluctuates notably over the reviewed period. After declining from 17.03 in 2016 to 15.87 in 2017, it recovered to 18.55 by 2019, indicating improved efficiency in using fixed assets to generate sales. However, this metric then dropped sharply to around 12.18 in 2020 and slightly increased to 13.09 in 2021. The decline in turnover coincides with the large increase in fixed assets, suggesting that asset growth outpaced revenue growth in those years.
Total Asset Turnover
Automatic Data Processing Inc., total asset turnover calculation, comparison to benchmarks
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenues | 15,005,400) | 14,589,800) | 14,175,200) | 13,325,800) | 12,379,800) | 11,667,800) | |
| Total assets | 48,772,500) | 39,165,500) | 41,887,700) | 37,088,700) | 37,180,000) | 43,670,000) | |
| Long-term Activity Ratio | |||||||
| Total asset turnover1 | 0.31 | 0.37 | 0.34 | 0.36 | 0.33 | 0.27 | |
| Benchmarks | |||||||
| Total Asset Turnover, Competitors2 | |||||||
| Accenture PLC | 1.17 | 1.20 | 1.45 | — | — | — | |
| Adobe Inc. | 0.58 | 0.53 | 0.54 | — | — | — | |
| Cadence Design Systems Inc. | 0.68 | 0.68 | — | — | — | — | |
| CrowdStrike Holdings Inc. | 0.32 | 0.34 | — | — | — | — | |
| Fair Isaac Corp. | 0.84 | 0.81 | 0.81 | — | — | — | |
| International Business Machines Corp. | 0.43 | 0.47 | — | — | — | — | |
| Intuit Inc. | 0.62 | 0.70 | 1.08 | — | — | — | |
| Microsoft Corp. | 0.50 | 0.47 | 0.44 | — | — | — | |
| Oracle Corp. | 0.31 | 0.34 | — | — | — | — | |
| Palantir Technologies Inc. | 0.47 | 0.41 | — | — | — | — | |
| Palo Alto Networks Inc. | 0.42 | 0.38 | 0.44 | — | — | — | |
| Salesforce Inc. | 0.32 | 0.31 | — | — | — | — | |
| ServiceNow Inc. | 0.55 | 0.52 | — | — | — | — | |
| Synopsys Inc. | 0.48 | 0.46 | 0.52 | — | — | — | |
| Workday Inc. | 0.50 | 0.53 | — | — | — | — | |
| Total Asset Turnover, Sector | |||||||
| Software & Services | 0.49 | 0.48 | — | — | — | — | |
| Total Asset Turnover, Industry | |||||||
| Information Technology | 0.62 | 0.58 | — | — | — | — | |
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
Total asset turnover = Revenues ÷ Total assets
= 15,005,400 ÷ 48,772,500 = 0.31
2 Click competitor name to see calculations.
- Revenues
- Revenues exhibit a consistent upward trend over the observed period. Starting from 11,667,800 thousand US dollars in mid-2016, revenues steadily increased each year, reaching 15,005,400 thousand US dollars by mid-2021. This growth indicates a positive business performance and expanded sales or service generation throughout the years.
- Total assets
- Total assets display a more variable pattern. Initially, there was a decline from 43,670,000 thousand US dollars in mid-2016 to 37,180,000 thousand US dollars in mid-2017, followed by a slight decrease in mid-2018. A recovery phase is apparent from mid-2019 to mid-2021, with assets increasing to 48,772,500 thousand US dollars. The fluctuations suggest periods of asset reduction potentially due to divestitures or depreciation, followed by asset growth possibly associated with acquisitions or capital investments.
- Total asset turnover
- The total asset turnover ratio reveals mixed dynamics. The ratio improved from 0.27 in mid-2016 to a peak of 0.37 in mid-2020, indicating enhanced efficiency in generating revenue from assets. However, a decline to 0.31 in mid-2021 suggests a decrease in asset utilization efficiency despite increased revenues, potentially linked to the significant increase in total assets during that year.
Equity Turnover
Automatic Data Processing Inc., equity turnover calculation, comparison to benchmarks
| 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 | 15,005,400) | 14,589,800) | 14,175,200) | 13,325,800) | 12,379,800) | 11,667,800) | |
| Stockholders’ equity | 5,670,100) | 5,752,200) | 5,399,900) | 3,459,600) | 3,977,000) | 4,481,600) | |
| Long-term Activity Ratio | |||||||
| Equity turnover1 | 2.65 | 2.54 | 2.63 | 3.85 | 3.11 | 2.60 | |
| Benchmarks | |||||||
| Equity Turnover, Competitors2 | |||||||
| Accenture PLC | 2.59 | 2.61 | 3.00 | — | — | — | |
| Adobe Inc. | 1.07 | 0.97 | 1.06 | — | — | — | |
| Cadence Design Systems Inc. | 1.09 | 1.08 | — | — | — | — | |
| CrowdStrike Holdings Inc. | 1.00 | 0.65 | — | — | — | — | |
| Fair Isaac Corp. | — | 3.91 | 4.00 | — | — | — | |
| International Business Machines Corp. | 3.03 | 3.57 | — | — | — | — | |
| Intuit Inc. | 0.98 | 1.50 | 1.81 | — | — | — | |
| Microsoft Corp. | 1.18 | 1.21 | 1.23 | — | — | — | |
| Oracle Corp. | 7.73 | 3.24 | — | — | — | — | |
| Palantir Technologies Inc. | 0.67 | 0.72 | — | — | — | — | |
| Palo Alto Networks Inc. | 6.71 | 3.09 | 1.83 | — | — | — | |
| Salesforce Inc. | 0.51 | 0.50 | — | — | — | — | |
| ServiceNow Inc. | 1.60 | 1.59 | — | — | — | — | |
| Synopsys Inc. | 0.79 | 0.75 | 0.82 | — | — | — | |
| Workday Inc. | 1.32 | 1.46 | — | — | — | — | |
| Equity Turnover, Sector | |||||||
| Software & Services | 1.44 | 1.51 | — | — | — | — | |
| Equity Turnover, Industry | |||||||
| Information Technology | 1.80 | 1.82 | — | — | — | — | |
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).
1 2021 Calculation
Equity turnover = Revenues ÷ Stockholders’ equity
= 15,005,400 ÷ 5,670,100 = 2.65
2 Click competitor name to see calculations.
- Revenues
- The revenues exhibit a consistent upward trajectory over the six-year period. Beginning at approximately 11.67 billion US dollars in mid-2016, there is a steady increase each year, reaching about 15.0 billion US dollars by mid-2021. This reflects ongoing growth in the company's sales or service income, with a cumulative increase of roughly 28.5% over the timeframe. The rate of revenue growth appears relatively stable, with no significant declines or volatility.
- Stockholders’ Equity
- The stockholders’ equity demonstrates notable variability during the period analyzed. Initially, equity decreases from about 4.48 billion US dollars in mid-2016 to a low of approximately 3.46 billion US dollars by mid-2018. Following this decline, there is a substantial increase to roughly 5.40 billion US dollars in mid-2019, with further growth peaking near 5.75 billion US dollars in mid-2020. The equity then slightly declines to approximately 5.67 billion US dollars by mid-2021. This pattern may indicate equity restructuring, share repurchases, dividend payouts, or other capital management activities influencing the equity base.
- Equity Turnover
- The equity turnover ratio reveals fluctuations that correspond inversely with changes in stockholders’ equity. Initially, the ratio increases from 2.6 times in mid-2016 to a peak of 3.85 times in mid-2018, coinciding with the period of declining equity, which amplifies turnover. Subsequently, the ratio declines to around 2.54 times by mid-2020 before experiencing a slight recovery to 2.65 times in mid-2021. These movements suggest that the company's efficiency in generating revenue from its equity base improved when equity was lower and moderated as equity increased.
- Overall Observations
- The company shows a positive revenue growth trend throughout the analyzed years, indicating a strong market performance. The fluctuations in stockholders’ equity imply active management of the company’s capital structure, while the equity turnover ratio variations reflect the interplay between revenue generation and equity base size. The data collectively suggest a company focused on growth with dynamic financial management strategies to balance asset utilization and equity financing.