The high-quality business pushed its operating profit margin up 3.9 percentage points, far beyond the margins of rivals such as Automatic Data Processing Inc., Intuit Inc. and Hewitt Associates L.L.C.

You know what earning better margins on growing revenue means: markedly better profits. Operating income grew 22 percent year-over-year in the third quarter. Even though declining interest rates hurt the bottom-line results, continued share buybacks concentrated the remaining profit among fewer shares outstanding, helping Paychex to grow its earnings per share 18 percent.

Free cash flow may not grow as fast as earnings (it is up 12 percent year-over-year through the first three-quarters of fiscal 2008), but at $525.8 million for the fiscal year to date, it continues to overshadow what Paychex reports as net income.

Relative to analysts' sub-15 percent long-term profit-growth projections, a P/E of 24 seems a bit much to pay. But relative to the company's price-to-free-cash-flow ratio - a better measure of cash profitability - it is a much closer call. Keep an eye on this one.