Answer To: Please see the notes below. I have done the project, but my numbers are not right. Can you please...
Sandeep answered on Apr 27 2022
Yahoo Finance
Income Stmt. & Balance Sheet
FCF
https://investors.adp.com/financial-information/sec-filings/sec-filings-details/default.aspx?FilingId=13584761
https://www.comparably.com/companies/adp/mission
Value Drivers (Assumptions) Percentage Cost of Equity Column1 Column2
Sales Growth 7.04% Please see the valuation tab for more Risk Free rate, rf 2%
Operating Expense 5.80% Market risk premium 5% Professor said to use 5
Depreciation Rate (% of Fixed Assets) 39.08% ADP Beta 0.85 Risk in comparision to market - a little more stable
Interest Rate on Debt 6.49%
Income Tax Rate 24.27% Cost of equity , re 6.25%
Income Statement
Year 0 2019 2018 2017 Average Statements Of Consolidated Earnings - USD ($) 12 Months Ended Consolidated Balance Sheets - USD ($) Jun. 30, 2019 Jun. 30, 2018 $ in Millions Jun. 30, 2018 Jun. 30, 2017 Unit Conversion
Revenues, Net 9,375,800,000 8,983,400,000 8,510,100,000 4.368% 5.562% shares in Millions, $ in Millions Jun. 30, 2019 Jun. 30, 2018 Jun. 30, 2017 Statement of Financial Position [Abstract] Current assets:
Interest on funds held for clients 561900000 466,500,000 397,400,000 REVENUES: Long-term Marketable Securities Under Reverse Repurchase Agreements $261,400,000 Cash and cash equivalents $2,170.00 $2,780.40
PEO revenues 4,237,500,000.00 3,877,800,000 3,464,500,000 Revenues, Net $9,375.80 $8,983.40 $8,510.10 Current assets: Accounts receivable, net of allowance for doubtful accounts of $51.3 and $49.6, respectively 1,984.20 1,703.60
TOTAL REVENUES 14,175,200,000.00 13,327,700,000 12,372,000,000 Interest on funds held for clients 561.9 466.5 397.4 Cash and cash equivalents 1,949,200,000 $2,170,000,000 Other current assets 758 883.2
Sales Growth Rate 6.36% 7.72% ERROR:#DIV/0! 7.04% PEO revenues [1] 4,237.50 3,877.80 3,464.50 Accounts receivable, net of allowance for doubtful accounts of $54.9 and $51.3, respectively 2,439,300,000 1,984,200,000 Total current assets before funds held for clients 4,912.20 5,367.20
EXPENSES: TOTAL REVENUES 14,175.20 13,327.70 12,372.00 Other current assets 519,600,000 531,300,000 Funds held for clients 27,137.80 27,291.50
Operating expenses 7,145,900,000 6,901,000,000 6,386,200,000 EXPENSES: Total current assets before funds held for clients 4,908,100,000 4,685,500,000 Total current assets 32,050.00 32,658.70 32,658,700,000 million
Operating expense growth rate 3.55% 8.06% ERROR:#DIV/0! 5.80%
Systems development and programming costs 636,300,000 635,400,000 632,100,000 Operating expenses 7,145.90 6,901.00 6,386.20 Funds held for clients 29,434,200,000 27,137,800,000 Long-term receivables, net of allowance for doubtful accounts of $0.5 and $0.8, respectively 25.5 28
Cost, Depreciation and Amortization 304,400,000 274,500,000 226,200,000 Systems development and programming costs 636.3 635.4 632.1 Total current assets 34,342,300,000 31,823,300,000 Property, plant and equipment, net 793.7 779.9 779,900,000 Million
Cost of Goods and Services Sold 8,086,600,000 7,810,900,000 7,244,500,000 Cost, Depreciation and Amortization 304.4 274.5 226.2 Long-term receivables, net of allowance for doubtful accounts of $0.4 and $0.5, respectively 23,800,000 25,500,000 Other assets 1,089.60 1,352.20
Selling, general, and administrative expenses 3,064,200,000 2,959,400,000 2,773,800,000 Cost of Goods and Services Sold 8,086.60 7,810.90 7,244.50 Property, plant and equipment, net 764,200,000 793,700,000 Goodwill 2,243.50 1,741.00
Interest expense 129,900,000 102,700,000 80,000,000 Selling, general, and administrative expenses 3,064.20 2,959.40 2,773.80 Capitalized Contract Cost, Net 2,428,500,000 2,377,400,000 Intangible assets, net 886.4 620.2
TOTAL EXPENSES 11,280,700,000 10,873,000,000 10,098,300,000 Interest expense 129.9 102.7 80 Other assets 934,400,000 699,300,000 Total assets 37,088.70 37,180.00 37,180,000,000.00 Million
Other (income)/expense, net (111,100,000) 172,100,000 (343,200,000) TOTAL EXPENSES 11,280.70 10,873.00 10,098.30 Goodwill 2,323,000,000 2,243,500,000 Liabilities
EARNINGS BEFORE INCOME TAXES 3,005,600,000 2,282,600,000 2,616,900,000 Other (income)/expense, net -111.1 172.1 -343.2 Intangible assets, net 1,071,500,000 886,400,000 Accounts payable 135.4 149.7
Provision for income taxes 712,800,000 397,700,000 829,100,000 EARNINGS BEFORE INCOME TAXES 3,005.60 2,282.60 2,616.90 Total assets 41,887,700,000 38,849,100,000 Accrued expenses and other current liabilities 1,547.70 1,381.90
Income Tax Rate 23.72% 17.42% 31.68% 24.27% Provision for income taxes 712.8 397.7 829.1 Liabilities Accrued payroll and payroll-related expenses 667.7 562.5
NET EARNINGS 2,292,800,000 1,884,900,000 1,787,800,000 NET EARNINGS $2,292.80 $1,884.90 $1,787.80 Accounts payable 125,500,000 135,400,000 Dividends payable 298.9 250.5
22% 5% 0% 9.02% Basic earnings per share (in dollars per share) $5.27 $4.28 $3.99 Accrued expenses and other current liabilities 1,759,000,000 1,547,600,000 Short-term deferred revenues 226.5 232.9
Balance Sheet 2019 2018 2017 BASIC EARNINGS PER SHARE (in dollars per share) 5.27 4.28 3.99 Accrued payroll and payroll-related expenses 721,100,000 667,700,000 Income taxes payable 43.9 49
Long-term Marketable Securities Under Reverse Repurchase Agreements $261,400,000 Diluted earnings per share (in dollars per share) 5.24 4.25 3.97 Dividends payable 340,100,000 298,900,000 Total current liabilities before client funds obligations 2,920.10 2,626.50 2,626,500,000 million
Current assets: DILUTED EARNINGS PER SHARE (in dollars per share) $5.24 $4.25 $3.97 Short-term deferred revenues 220,700,000 225,700,000 Client funds obligations 27,493.50 27,189.40
Cash and cash equivalents 1,949,200,000 $2,170,000,000 Basic weighted average shares outstanding (in...