ADPAutomatic Data Processing
Is the business good?
The checks split: earnings fully cash-backed (1.3×), but returns that lean on debt.
Mixed fundamental signals. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash.
Profits are tracking sales roughly one-for-one, limited operating leverage either way.
Leverage-amplified, a high assets-to-equity ratio does much of the work. ROE 68% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is ADP?
Automatic Data Processing earns 62% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 53 points above what the capital costs: growth creates value
- Operating margin
- 24%
Operating margin · Software - Application median 6.9% · 12 months to Q4 2026
- Cash conversion
- 1.33×
Cash conversion · 1.30× a year ago · operating cash flow covers the operating profit after tax
- R&D as % of revenue
- 4.7%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2021 | 22% |
| FY2022 | 23% |
| FY2023 | 24% |
| FY2024 | 24% |
| FY2025 | 24% |
| FY2026 | 24% |
Details›
- Gross margin12 months to Q4 2026
- 46%
- Operating margin12 months to Q4 2026
- 24%
- Net margin12 months to Q4 2026
- 20%
- Free cash flow margin
- 24%
- R&D as % of revenue
- 4.7%
- Revenue, trailing twelve months
- $21.9B
- Free cash flow, trailing twelve months
- $5.24B
- Net income, trailing twelve months
- $4.41B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 62%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Software, Application
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