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Arphra AIPlain-English read on Paychex, Inc.’s valuationRatios & metrics
Profitability, returns on capital, growth, and credit — all derived from the historical income statement, balance sheet, and cash flow rows in our data warehouse.
Quality composite
A+Top tier
A snapshot of the latest fiscal year’s margins, returns on capital, balance-sheet strength and efficiency, computed from the income statement, balance sheet and cash-flow rows. Source income / balance / cash_flow.
Profitability
Gross margin72.4%
Operating margin39.6%
Net margin29.7%
ROE40.1%
ROA10.0%
ROIC22.4%
Liquidity & leverage
Current ratio1.28×
Quick ratio1.28×
Debt / equity1.22×
Net debt / EBITDA1.36×
Interest coverage21×
Efficiency & per-share
Asset turnover0.34×
Inventory days0
Days sales out.129
FCF / share$4.86
Book value / share$11.40
Valuation multiples
Price- and EV-based multiples plus shareholder yields. Snapshot at each fiscal year-end from key_metrics (FMP).
ActualEstimate
| In USD | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 | 2027E | 2028E | 2029E |
|---|---|---|---|---|---|---|---|---|
| Headline | ||||||||
| Market cap | — | — | — | $43.29B | $56.88B | — | — | — |
| Enterprise value | — | — | — | $42.69B | $60.27B | — | — | — |
| Multiples | ||||||||
| P / E | — | — | — | — | — | — | — | — |
| P / B | — | — | — | — | — | — | — | — |
| EV / EBITDA | — | — | — | — | — | — | — | — |
| EV / Sales | — | — | — | 8.09 | 10.82 | — | — | — |
| EV / FCF | — | — | — | 24.59 | 34.26 | — | — | — |
| Yields | ||||||||
| Earnings yield | — | — | — | +3.90% | +2.91% | — | — | — |
| Free cash flow yield | — | — | — | +4.01% | +3.09% | — | — | — |
| Dividend yield | — | — | — | — | — | — | — | — |
Profitability
Margin structure across the last 5 fiscal years
ActualEstimate
| In USD | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 | 2027E | 2028E | 2029E |
|---|---|---|---|---|---|---|---|---|
| Margins | ||||||||
| Gross margin | +68.66% | +70.59% | +70.98% | +71.97% | +72.35% | +71.53% | +72.38% | +70.53% |
| Operating margin | +36.01% | +39.90% | +40.60% | +41.19% | +39.62% | +41.03% | +39.64% | +41.67% |
| EBITDA margin | +40.74% | +44.06% | +44.13% | +46.07% | +44.70% | +45.67% | +45.78% | +45.86% |
| EBIT margin | +36.01% | +39.90% | +40.60% | +42.73% | +40.94% | +42.13% | +41.33% | +42.38% |
| Pre-tax margin | +35.35% | +39.56% | +40.91% | +42.02% | +39.05% | +39.52% | +40.67% | +40.44% |
| Net margin | +27.05% | +30.20% | +31.10% | +32.03% | +29.74% | +31.63% | +30.85% | +31.42% |
| Cost structure | ||||||||
| Cost of revenue / sales | +31.34% | +29.41% | +29.02% | +28.03% | +27.65% | +28.30% | +28.14% | +27.68% |
| R&D intensity | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| SG&A intensity | +32.66% | +30.69% | +30.38% | +30.78% | +32.73% | +31.77% | +31.15% | +32.11% |
| Effective tax rate | +23.48% | +23.67% | +23.97% | +23.79% | +23.83% | +24.65% | +24.03% | +23.90% |
Returns on capital
ROE / ROA / ROC / ROIC over the relevant capital base, plus the 3-step DuPont decomposition of ROE.
ActualEstimate
| In USD | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 | 2027E | 2028E | 2029E |
|---|---|---|---|---|---|---|---|---|
| Returns | ||||||||
| Return on equity (ROE) | +37.23% | +45.14% | +44.58% | +44.47% | +40.15% | +44.00% | +41.42% | +41.72% |
| Return on assets (ROA) | +11.89% | +14.46% | +14.77% | +16.28% | +10.01% | +13.51% | +13.16% | +13.21% |
| Return on capital (ROC) | +37.99% | +46.39% | +46.64% | +46.58% | +24.13% | +36.53% | +34.21% | +35.62% |
| Return on invested capital (ROIC) | +28.54% | +35.11% | +35.73% | +36.22% | +18.11% | +28.16% | +26.63% | +26.86% |
| Asset turnover | +43.97% | +47.86% | +47.48% | +50.84% | +33.64% | +42.72% | +42.65% | +42.06% |
| DuPont · ROE decomposition | ||||||||
| Net margin | +27.05% | +30.20% | +31.10% | +32.03% | +29.74% | +31.63% | +30.85% | +31.42% |
| Asset turnover (× revenue / assets) | +43.97% | +47.86% | +47.48% | +50.84% | +33.64% | +42.72% | +42.65% | +42.06% |
| Equity multiplier (× assets / equity) | +313.00% | +312.30% | +301.91% | +273.17% | +401.26% | +325.59% | +314.74% | +315.75% |
Activity & efficiency
Turnover ratios and days-outstanding — how efficiently the business converts assets and working capital into sales and cash.
ActualEstimate
| In USD | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 | 2027E | 2028E | 2029E |
|---|---|---|---|---|---|---|---|---|
| Turnover | ||||||||
| Asset turnover | 0.44 | 0.48 | 0.47 | 0.51 | 0.34 | 0.43 | 0.43 | 0.42 |
| Fixed-asset turnover | 8.13 | 9.61 | 10.94 | 11.51 | 9.68 | — | — | — |
| Inventory turnover | — | — | — | — | — | — | — | — |
| Receivables turnover | 3.85 | 3.50 | 3.51 | 3.25 | 2.82 | — | — | — |
| Payables turnover | 14.28 | 12.83 | 17.15 | 14.18 | 11.87 | — | — | — |
| Days outstanding | ||||||||
| Days sales outstanding (DSO) | 94.79 | 104.33 | 103.96 | 112.39 | 129.38 | — | — | — |
| Days inventory outstanding (DIO) | — | — | — | — | — | — | — | — |
| Days payables outstanding (DPO) | 25.55 | 28.45 | 21.28 | 25.73 | 30.76 | — | — | — |
| Cash conversion cycle | 69.24 | 75.89 | 82.69 | 86.66 | 98.63 | — | — | — |
Cash flow quality
How well reported earnings translate into operating and free cash flow, plus reinvestment intensity.
ActualEstimate
| In USD | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 | 2027E | 2028E | 2029E |
|---|---|---|---|---|---|---|---|---|
| Operating CF / Net income | 1.15 | 1.08 | 1.09 | 1.12 | 1.18 | 1.13 | 1.11 | 1.13 |
| FCF / Net income | 1.04 | 0.99 | 1.00 | 1.03 | 1.06 | 1.01 | 1.02 | 1.00 |
| FCF margin | +28.24% | +29.77% | +31.08% | +32.90% | +31.58% | +32.10% | +31.60% | +31.50% |
| OCF margin | +31.07% | +32.65% | +33.94% | +35.95% | +35.02% | +35.80% | +34.17% | +35.49% |
| CapEx / Revenue | +2.82% | +2.88% | +2.86% | +3.06% | +3.44% | +3.16% | +3.21% | +3.05% |
| CapEx / D&A | 0.60 | 0.69 | 0.81 | 0.91 | 0.92 | — | — | — |
| Stock-based comp / Revenue | +1.29% | +1.14% | +1.25% | +1.16% | +2.01% | — | — | — |
Per-share & shareholder yield
EPS, book value, sales, cash flow and dividends per share — plus payout / retention.
ActualEstimate
| In USD | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 | 2027E | 2028E | 2029E |
|---|---|---|---|---|---|---|---|---|
| EPS · diluted | 3.03 | 3.84 | 4.30 | 4.67 | 4.58 | 5.92 | 6.33 | 6.79 |
| EPS · basic | 3.05 | 3.86 | 4.32 | 4.69 | 4.60 | 5.90 | 6.36 | 6.74 |
| Book value / share | 8.14 | 8.50 | 9.64 | 10.50 | 11.40 | 13.74 | 14.96 | 16.39 |
| Tangible BV / share | 2.35 | 2.83 | 4.06 | 4.76 | -6.45 | 13.74 | 14.96 | 16.39 |
| Sales / share | 11.20 | 12.70 | 13.82 | 14.58 | 15.39 | 19.11 | 20.08 | 21.77 |
| Operating CF / share | 3.48 | 4.15 | 4.69 | 5.24 | 5.39 | 6.84 | 6.86 | 7.72 |
| Free cash flow / share | 3.16 | 3.78 | 4.30 | 4.80 | 4.86 | 6.13 | 6.35 | 6.86 |
| Dividends / share | 2.51 | 2.75 | 3.24 | 3.63 | 4.00 | 4.85 | 5.02 | 5.38 |
| Payout ratio | +82.80% | +71.77% | +75.45% | +77.81% | +87.40% | +80.32% | +80.96% | +78.73% |
| Retention ratio | +17.20% | +28.23% | +24.55% | +22.19% | +12.60% | +19.68% | +19.04% | +21.27% |
Growth
Year-over-year change for headline P&L lines, plus through-cycle CAGR
ActualEstimate
| In USD | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 | 2027E | 2028E | 2029E | 7y CAGR |
|---|---|---|---|---|---|---|---|---|---|
| Top-line | |||||||||
| Revenue · YoY | — | +13.68% | +8.57% | +5.42% | +5.56% | +23.23% | +5.49% | +8.15% | +9.86% |
| Gross profit · YoY | — | +16.87% | +9.18% | +6.89% | +6.11% | +21.83% | +6.74% | +5.38% | +10.28% |
| Profit | |||||||||
| Operating income · YoY | — | +25.97% | +10.49% | +6.94% | +1.55% | +27.61% | +1.90% | +13.68% | +12.17% |
| EBITDA · YoY | — | +22.94% | +8.76% | +10.05% | +2.43% | +25.89% | +5.74% | +8.33% | +11.73% |
| Net income · YoY | — | +26.91% | +11.81% | +8.55% | -1.96% | +31.05% | +2.90% | +10.11% | +12.23% |
| Operating | |||||||||
| EBIT · YoY | — | +25.97% | +10.49% | +10.93% | +1.15% | +26.81% | +3.48% | +10.89% | +12.44% |
| R&D · YoY | — | — | — | — | — | — | — | — | — |
| Per-share | |||||||||
| EPS · diluted · YoY | — | +26.73% | +11.98% | +8.60% | -1.93% | +29.24% | +6.88% | +7.33% | +12.22% |
| EPS · basic · YoY | — | +26.56% | +11.92% | +8.56% | -1.92% | +28.20% | +7.83% | +5.98% | +11.99% |
Credit & leverage
Balance-sheet health + interest coverage + liquidity. Coverage ratios use period-end debt and trailing interest expense.
ActualEstimate
| In USD | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 | 2027E | 2028E | 2029E |
|---|---|---|---|---|---|---|---|---|
| Leverage | ||||||||
| Total debt | $897.1M | $881.2M | $865.7M | $866.3M | $5.02B | $2.78B | $3B | $3.26B |
| Net debt | -$98.1M | $511.2M | -$356.3M | -$602.6M | $3.39B | $878.55M | $1.03B | $1.12B |
| Net debt / EBITDA | -0.06 | 0.25 | -0.16 | -0.25 | 1.36 | 0.28 | 0.31 | 0.31 |
| Debt / equity | 0.30 | 0.29 | 0.25 | 0.23 | 1.22 | 0.56 | 0.56 | 0.55 |
| Debt / assets | +9.72% | +9.15% | +8.21% | +8.34% | +30.32% | +17.28% | +17.64% | +17.52% |
| Equity / assets | +31.95% | +32.02% | +33.12% | +36.61% | +24.92% | +30.71% | +31.77% | +31.67% |
| Coverage | ||||||||
| EBITDA / interest expense | 46.16 | 55.51 | 60.21 | 65.20 | 23.63 | 41.97 | 40.55 | 42.11 |
| Operating income / interest | 40.80 | 50.27 | 55.40 | 58.29 | 20.95 | 37.71 | 35.11 | 38.26 |
| Interest expense | $35.8M | $36.6M | $36.7M | $37.3M | $105.4M | $74.71M | $81.78M | $85.31M |
| Liquidity | ||||||||
| Current ratio | 1.25 | 1.25 | 1.30 | 1.37 | 1.28 | — | — | — |
| Quick ratio | 0.42 | 0.48 | 0.52 | 0.59 | 0.52 | — | — | — |
| Cash ratio | 0.20 | 0.07 | 0.21 | 0.28 | 0.23 | — | — | — |
| Working capital | $1.23B | $1.31B | $1.72B | $1.94B | $1.96B | — | — | — |
| Working capital / revenue | +30.35% | +28.46% | +34.41% | +36.80% | +35.18% | — | — | — |
Sourced from key_metrics + financial_ratios (loaded by load_fundamentals_extended.py).
Valuation
| Metric | FY 2025 | FY 2024 |
|---|---|---|
| P / E | — | — |
| P / B | — | — |
| EV / EBITDA | — | — |
| EV / Sales | 10.82x | 8.09x |
| Earnings yield | 2.9% | 3.9% |
| FCF yield | 3.1% | 4.0% |
Returns
| Metric | FY 2025 | FY 2024 |
|---|---|---|
| Gross margin | — | — |
| Operating margin | — | — |
| Net margin | — | — |
| ROE | 40.1% | 44.5% |
| ROA | 10.0% | 16.3% |
| ROIC | 16.8% | 32.5% |
Leverage & liquidity
| Metric | FY 2025 | FY 2024 |
|---|---|---|
| Debt / equity | — | — |
| Net debt / EBITDA | 1.36 | -0.25 |
| Interest coverage | — | — |
| Current ratio | 1.28x | 1.37x |
| Quick ratio | — | — |
Methodology. ROE / ROA / ROC use period-end balance-sheet denominators (no average-of- period smoothing). ROIC = Operating Income × (1 − inferred effective tax rate) over invested capital, with the effective tax inferred from net-to-operating income when both are positive and a 25% default otherwise. Net debt / EBITDA, debt ratios, and interest-coverage ratios are calculated point-in-time at each fiscal year-end. TTM = trailing 4 quarters (income / cash flow summed, balance sheet = most-recent quarterly snapshot). Through-cycle CAGR in the Growth panel uses the geometric mean of first-to-last period growth across the window (positive values only).