AUTOMATIC DATA PROCESSING's gross profit margin for the first quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. AUTOMATIC DATA PROCESSING has very weak liquidity. Currently, the Quick Ratio is 0.25 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.
During the same period, stockholders' equity ("net worth") has decreased by 5.90% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
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|Income Statement||Q1 FY15||Q1 FY14|
|Net Sales ($mil)||2573.8||2362.0|
|Net Income ($mil)||295.2||328.6|
|Balance Sheet||Q1 FY15||Q1 FY14|
|Cash & Equiv. ($mil)||4437.3||1690.9|
|Total Assets ($mil)||30208.1||29481.3|
|Total Debt ($mil)||1947.9||2832.1|
|Profitability||Q1 FY15||Q1 FY14|
|Gross Profit Margin||41.97||41.71|
|Return on Assets||4.9||4.84|
|Return on Equity||26.35||21.32|
|Debt||Q1 FY15||Q1 FY14|
|Share Data||Q1 FY15||Q1 FY14|
|Shares outstanding (mil)||481.8||481.8|
|Div / share||0.48||0.44|
|Book value / share||12.09||12.85|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||1995110.0||1569698.0|
BUY. AUTOMATIC DATA PROCESSING's P/E ratio indicates a premium compared to an average of 23.75 for the IT Services industry and a premium compared to the S&P 500 average of 19.47. To use another comparison, its price-to-book ratio of 7.16 indicates a significant premium versus the S&P 500 average of 2.75 and a significant discount versus the industry average of 9.28. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average.
|ADP 27.24||Peers 23.75||ADP 19.64||Peers 20.54|
Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.
ADP is trading at a premium to its peers.
Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.
ADP is trading at a valuation on par to its peers.
|ADP 26.25||Peers 20.48||ADP NM||Peers 1.71|
Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.
ADP is trading at a significant premium to its peers.
Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.
ADP's negative PEG ratio makes this valuation measure meaningless.
|ADP 7.16||Peers 9.28||ADP 16.91||Peers 19.46|
Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.
ADP is trading at a discount to its peers.
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
However, ADP is expected to trail its peers on the basis of its earnings growth rate.
|ADP 3.36||Peers 5.10||ADP 12.76||Peers 8.10|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.
ADP is trading at a significant discount to its industry on this measurement.
Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.
ADP has a sales growth rate that significantly exceeds its peers.
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