Complete the ratios using the data available for Automatic Data Processing (ADP.) Using actual financial statements introduces students to real-world decisions. For example, ADP has no inventory listed, so the quick ratio is the same as the current ratio. But, should short-term marketable securities be included as cash in the cash ratio? We chose not to include them, but a strong argument can be made for its inclusion. Show some calculations to get an idea

File Home Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do F13 Automatic Data Processing (ADP) Jun. 30, 2015 Jun. 30, 2014 2014 Revenues, other than interest on funds held for clients and PEO revenues interest on funds held for clients TAL REVENUES EXPENSES: Operating expenses Systems development and programming costs 10,226.4 5,6253 5,2908 TOTAL COSTS OF REVENUES Selling. general and administrative expenses 44 Interest expense TOTAL EXPENSES (632) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES NET EARNINGS FROM CONTINUING OPERATIONS EARNINGS FROM DSCONTINUED OPERATIONS BEFORE INCOME TAXES NET EARNINGS FROM DISCONTINUED OPERATIONS $1,452.5 1,5159 54 Basic Earnings Per Share from Continuing Operations Basic earnings per share from discontinued operations PER SHARE Diluted earnings per share from continuing operations Diluted earnings per share from discontinued operations Basic weighted average shares outstanding average shares Consolidated Balance Sheets- USD (S) $ in lun. 30, 2015 Jun. 30, 2014 Commonsize HomeI Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do F13 Ratio Computation Complete the ratios using the data available for Automatic Data Processing (ADP.)Using actual financial statements introduces students to real world decisions For example, ADP has no inventory listed, so the quick ratio is the same as the current ratio. But, should short term marketable securities be included as cash in the cash ratio? We chose not to include them, but a strong argument can be made for its inclusion. Short-Term Solvency, or Liquidity, Measures Current ratio: Quick ratio: Cash ratio: 2015 2014 Long -Term Solvency Measures Total debt ratio: 13Debt-equity ratio Equity multiplier: Times interest earned: 16 Cash coverage: Asset Management, or Turnover, Measures Because I did not cover in class 19 20 Days sales in inventory: 21 22 Days' sales in receivables: 23 Inventory turnover: Receivables turnover Total asset turnover: 25 Profitability Measures 26 27 Return on assets (ROA): 28 Return on equity (ROE) PM TAT' EM ROE Dupont Identity Return on equity (ROE): Profit margin: Automatic Data Processing (ADP) 30 File Home Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do F13 Automatic Data Processing (ADP) Jun. 30, 2015 Jun. 30, 2014 2014 Revenues, other than interest on funds held for clients and PEO revenues interest on funds held for clients TAL REVENUES EXPENSES: Operating expenses Systems development and programming costs 10,226.4 5,6253 5,2908 TOTAL COSTS OF REVENUES Selling. general and administrative expenses 44 Interest expense TOTAL EXPENSES (632) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES NET EARNINGS FROM CONTINUING OPERATIONS EARNINGS FROM DSCONTINUED OPERATIONS BEFORE INCOME TAXES NET EARNINGS FROM DISCONTINUED OPERATIONS $1,452.5 1,5159 54 Basic Earnings Per Share from Continuing Operations Basic earnings per share from discontinued operations PER SHARE Diluted earnings per share from continuing operations Diluted earnings per share from discontinued operations Basic weighted average shares outstanding average shares Consolidated Balance Sheets- USD (S) $ in lun. 30, 2015 Jun. 30, 2014 Commonsize HomeI Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do F13 Ratio Computation Complete the ratios using the data available for Automatic Data Processing (ADP.)Using actual financial statements introduces students to real world decisions For example, ADP has no inventory listed, so the quick ratio is the same as the current ratio. But, should short term marketable securities be included as cash in the cash ratio? We chose not to include them, but a strong argument can be made for its inclusion. Short-Term Solvency, or Liquidity, Measures Current ratio: Quick ratio: Cash ratio: 2015 2014 Long -Term Solvency Measures Total debt ratio: 13Debt-equity ratio Equity multiplier: Times interest earned: 16 Cash coverage: Asset Management, or Turnover, Measures Because I did not cover in class 19 20 Days sales in inventory: 21 22 Days' sales in receivables: 23 Inventory turnover: Receivables turnover Total asset turnover: 25 Profitability Measures 26 27 Return on assets (ROA): 28 Return on equity (ROE) PM TAT' EM ROE Dupont Identity Return on equity (ROE): Profit margin: Automatic Data Processing (ADP) 30