Automatic Story

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ADP -- USA Stock  

USD 175.25  1.17  0.67%

Automatic Data Proce is scheduled to announce its earnings today. The next earnings report is expected on the 3rd of February 2021. The stock is currently experiences an active upward rally. Automatic Data Accounts Payable Turnover is very stable at the moment as compared to the past year. Automatic Data reported last year Accounts Payable Turnover of 127.91. As of 28th of October 2020, Accrued Expenses Turnover is likely to grow to 15.83, while Earnings Before Interest Taxes and Depreciation Amortization EBITDA are likely to drop about 3.6 B. As many millenniums are trying to avoid industrials space, it makes sense to recap Automatic Data Processing a little further and try to understand its current market patterns. We will check if the company can maintain a respectable level of debt while minimizing operating losses.
Published over three weeks ago
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How much will Automatic Data owe in November?
Automatic Data Proce has 2.46 B in debt with debt to equity (D/E) ratio of 0.43, which is OK given its current industry classification. The entity has a current ratio of 1.03, demonstrating that it is in a questionable position to pay out its financial commitments when the payables are due. About 82.0% of the company shares are held by institutions such as insurance companies. Automatic Data Proce has Price/Earnings To Growth (PEG) ratio of 2.81. The entity recorded earning per share (EPS) of 5.7. The firm last dividend was issued on the 10th of September 2020. Automatic Data had 1139:1000 split on the 1st of October 2014.
Automatic Data financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Automatic Data, including all of Automatic Data's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Automatic Data assets, the company is considered highly leveraged. Understanding the composition and structure of overall Automatic Data debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Automatic Total Liabilities

Automatic Data Proce liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Automatic Data Proce has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Automatic Data balance sheet include debt obligations and money owed to different Automatic Data vendors, workers, and loan providers. Below is the chart of Automatic short long-term liabilities accounts currently reported on its balance sheet.
You can use Automatic Data Processing financial leverage analysis tool to get a better grip on understanding its financial position

How important is Automatic Data's Liquidity

Automatic Data financial leverage refers to using borrowed capital as a funding source to finance Automatic Data Processing ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Automatic Data financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Automatic Data's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Automatic Data, but it might be worth checking our own buy vs. sell analysis

Breaking it down

The firm reported the last year's revenue of 14.59 B. Total Income to common stockholders was 2.47 B with profit before taxes, overhead, and interest of 6.51 B.

Liabilities Breakdown

31.9 B
Current Liabilities
Long-Term Liabilities
Total Liabilities34.98 Billion
Current Liabilities31.91 Billion
Long-Term Liabilities3.07 Billion
Tax Liabilities640.08 Million

Automatic Data is likely to close below $158 next week

Recent Risk Adjusted Performance is up to 0.03. Price may decline again. Automatic Data Processing currently demonstrates below-verage downside deviation. It has Information Ratio of -0.01 and Jensen Alpha of 0.03. However, we do advice investors to further question Automatic Data Processing expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Takeaway on Automatic Data Investment

Although some other entities under the staffing & employment services industry are still a bit expensive, Automatic Data may offer a potential longer-term growth to insiders. The bottom line, as of the 28th of October 2020, our research shows that Automatic Data is a rather very steady investment opportunity with a very small probability of distress in the next two years. From a slightly different view, the entity currently appears to be overvalued. Our concluding 30 days 'Buy-vs-Sell' recommendation on the firm is Cautious Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Automatic Data Processing. Please refer to our Terms of Use for any information regarding our disclosure principles.

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