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Business & Marketing
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ADP and Bill.com. Business & Marketing Assignment. (Essay Sample)

Instructions:

1) Briefly describe the companies’ primary product offerings. Use the business description sections and management’s discussion and analysis sections, as well as the companies’ disclosures about segments.
2) Describe ADP’s dividends and share repurchases.
a) How much did ADP pay in dividends in fiscal 2019, in total and per share?
b) How much stock did ADP repurchase, in dollars, shares, and as a percentage of shares outstanding at the beginning of the year?
c) ADP was founded in 1949. Suppose ADP continues to operate for another 70 years and its discount rate is 3.5%. If ADP pays the same amount in dividends and repurchases to investors as it did in fiscal 2019 every year for the next 70 years, what is the present value of those payments? Compare this present value to the market value of the common stock stated on the title page of the 10-K.
3) Describe Bill.com’s initial public offering.
a) How much did stock did Bill.com issue in shares and dollars, in total and as compared to the amount of outstanding?
b) How does the company plan to use the proceeds from the sale of stock?
c) Based on the stock price at the initial public offering, the market value of Bill.com’s common stock was approximately $1.56 billion. Suppose Bill.com continues to operate for the next 70 years and its discount rate is 3.5%. If Bill.com pays the same amount in dividends and repurchases to investors every year for the next 70 years, how much must it pay investors each year to justify this valuation of the common stock?
4) ADP’s largest liability is its “Client funds obligations.”
a) What is this liability? To whom is the liability owed? How does the liability get created and how does the company pay off this liability?
b) How does having this liability benefit ADP?
c) What are the risks of having this liability and what does ADP do to reduce those risks?
5) Bill.com’s largest liability is its “Customer fund deposits.”
a) What is this liability? To whom is the liability owed? How does the liability get created and how does the company pay off this liability?
b) How does having this liability benefit Bill.com?
c) What are the risks of having this liability and what does Bill.com do to reduce those risks?
6) Based on your analyses of ADP’s “Client funds obligations” and Bill.com’s “Customer fund deposits”, what must these companies do successfully in order to remain in business for the next 70 years and pay steady dividends over that time?

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Content:


Automatic Data processing (ADP) and Bill.Com Financial Analysis
Course Name
Student’s Name
Date
Professor’s Name
Automatic Data processing (ADP) and Bill.Com Financial Analysis
The primary products that ADP trades in is the strategic cloud based products and solutions for client size and geography. These products include HCM solutions, HRO solutions and Global solutions for businesses. These are hardware and software computing components that make cloud computing possible. The ADP’s key businesses segments are the Employer services and the Professional employer organization.
Employer Services. Our Employer Services segment serves clients ranging from single-employee small businesses to large enterprises with tens of thousands of employees around the world, offering a comprehensive range of technology-based HCM solutions, including our strategic, cloud-based platforms, and HRO (other than PEO) solutions. These solutions address critical client needs and include: Payroll Services, Benefits Administration, Talent Management, HR Management, Workforce Management, Compliance Services, Insurance Services and Retirement Services.
Professional Employer Organization. ADP PEO business, called ADP TotalSource, provides clients with comprehensive employment administration outsourcing solutions through a relationship in which employees who work for a client (referred to as “worksite employees”) are co-employed by us and the client.

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