Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Paycom Software Inc., profitability ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Paycom Software Inc. gross profit margin ratio deteriorated from 2020 to 2021 and from 2021 to 2022. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Paycom Software Inc. operating profit margin ratio improved from 2020 to 2021 and from 2021 to 2022. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Paycom Software Inc. net profit margin ratio improved from 2020 to 2021 and from 2021 to 2022. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Paycom Software Inc. ROE improved from 2020 to 2021 and from 2021 to 2022. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Paycom Software Inc. ROA improved from 2020 to 2021 and from 2021 to 2022. |
Gross Profit Margin
Paycom Software Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross profit | 1,162,477) | 893,638) | 717,888) | 627,924) | 475,573) | |
| Revenues | 1,375,218) | 1,055,524) | 841,434) | 737,671) | 566,336) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 84.53% | 84.66% | 85.32% | 85.12% | 83.97% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Cintas Corp. | 46.24% | 46.58% | 45.64% | 45.39% | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 1,162,477 ÷ 1,375,218 = 84.53%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Paycom Software Inc. gross profit margin ratio deteriorated from 2020 to 2021 and from 2021 to 2022. |
Operating Profit Margin
Paycom Software Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | 378,679) | 253,567) | 186,123) | 226,224) | 173,715) | |
| Revenues | 1,375,218) | 1,055,524) | 841,434) | 737,671) | 566,336) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 27.54% | 24.02% | 22.12% | 30.67% | 30.67% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Cintas Corp. | 20.21% | 19.47% | 16.41% | 16.45% | — | |
| Operating Profit Margin, Industry | ||||||
| Industrials | 9.19% | 9.36% | 3.31% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × 378,679 ÷ 1,375,218 = 27.54%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Paycom Software Inc. operating profit margin ratio improved from 2020 to 2021 and from 2021 to 2022. |
Net Profit Margin
Paycom Software Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 281,389) | 195,960) | 143,453) | 180,576) | 137,065) | |
| Revenues | 1,375,218) | 1,055,524) | 841,434) | 737,671) | 566,336) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 20.46% | 18.57% | 17.05% | 24.48% | 24.20% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Cintas Corp. | 15.73% | 15.61% | 12.36% | 12.84% | — | |
| Net Profit Margin, Industry | ||||||
| Industrials | 5.16% | 5.96% | 0.25% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 281,389 ÷ 1,375,218 = 20.46%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Paycom Software Inc. net profit margin ratio improved from 2020 to 2021 and from 2021 to 2022. |
Return on Equity (ROE)
Paycom Software Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 281,389) | 195,960) | 143,453) | 180,576) | 137,065) | |
| Stockholders’ equity | 1,182,607) | 893,714) | 655,643) | 526,628) | 334,753) | |
| Profitability Ratio | ||||||
| ROE1 | 23.79% | 21.93% | 21.88% | 34.29% | 40.95% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Cintas Corp. | 37.35% | 30.13% | 27.08% | 29.47% | — | |
| ROE, Industry | ||||||
| Industrials | 15.70% | 15.61% | 0.67% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 281,389 ÷ 1,182,607 = 23.79%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Paycom Software Inc. ROE improved from 2020 to 2021 and from 2021 to 2022. |
Return on Assets (ROA)
Paycom Software Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 281,389) | 195,960) | 143,453) | 180,576) | 137,065) | |
| Total assets | 3,902,513) | 3,215,145) | 2,607,912) | 2,486,917) | 1,521,926) | |
| Profitability Ratio | ||||||
| ROA1 | 7.21% | 6.09% | 5.50% | 7.26% | 9.01% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Cintas Corp. | 15.17% | 13.49% | 11.42% | 11.90% | — | |
| ROA, Industry | ||||||
| Industrials | 3.40% | 3.48% | 0.12% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 281,389 ÷ 3,902,513 = 7.21%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Paycom Software Inc. ROA improved from 2020 to 2021 and from 2021 to 2022. |