Automatic Data Processing IncFind Ratings Reports
AUTOMATIC DATA PROCESSING's gross profit margin for the fourth quarter of its fiscal year 2017 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 0.15 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.
During the same period, stockholders' equity ("net worth") has decreased by 11.25% 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||Q4 FY17||Q4 FY16|
|Net Sales ($mil)||3064.9||2898.3|
|Net Income ($mil)||265.8||282.0|
|Balance Sheet||Q4 FY17||Q4 FY16|
|Cash & Equiv. ($mil)||2783.6||3214.6|
|Total Assets ($mil)||37180.0||43670.0|
|Total Debt ($mil)||2010.2||2010.2|
|Profitability||Q4 FY17||Q4 FY16|
|Gross Profit Margin||42.42||43.94|
|Return on Assets||4.66||3.41|
|Return on Equity||43.58||33.32|
|Debt||Q4 FY17||Q4 FY16|
|Share Data||Q4 FY17||Q4 FY16|
|Shares outstanding (mil)||445.0||455.7|
|Div / share||0.57||0.53|
|Book value / share||8.94||9.83|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||4488136.0||1868538.0|
BUY. The current P/E ratio indicates a discount compared to an average of 32.72 for the IT Services industry and a premium compared to the S&P 500 average of 24.23. For additional comparison, its price-to-book ratio of 11.71 indicates a significant premium versus the S&P 500 average of 3.02 and a significant premium versus the industry average of 8.83. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, AUTOMATIC DATA PROCESSING seems to be trading at a discount to investment alternatives within the industry.
|ADP 27.26||Peers 32.72||ADP 21.91||Peers 20.35|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.
ADP is trading at a discount 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 24.81||Peers 23.51||ADP NM||Peers 1.32|
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 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 11.71||Peers 8.83||ADP 18.15||Peers 10.57|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.
ADP is trading at a significant premium to its peers.
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
ADP is expected to have an earnings growth rate that significantly exceeds its peers.
|ADP 3.76||Peers 5.95||ADP 6.10||Peers 13.22|
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.
Lower. A sales growth rate that trails the industry implies that a company is losing market share.
ADP significantly trails its peers on the basis of sales growth