Stock Analysis on Net

Estée Lauder Cos. Inc. (NYSE:EL)

This company has been moved to the archive! The financial data has not been updated since August 18, 2023.

Financial Reporting Quality: Aggregate Accruals

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Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Estée Lauder Cos. Inc., balance sheet computation of aggregate accruals

US$ in millions

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Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Operating Assets
Total assets 23,415 20,910 21,971 17,781 13,156 12,567
Less: Cash and cash equivalents 4,029 3,957 4,958 5,022 2,987 2,181
Less: Short-term investments 534
Operating assets 19,386 16,953 17,013 12,759 10,169 9,852
Operating Liabilities
Total liabilities 16,998 14,478 15,023 13,819 8,745 7,857
Less: Current debt 997 268 32 1,222 516 183
Less: Long-term debt, excluding current maturities 7,117 5,144 5,537 4,914 2,896 3,361
Operating liabilities 8,884 9,066 9,454 7,683 5,333 4,313
 
Net operating assets1 10,502 7,887 7,559 5,076 4,836 5,539
Balance-sheet-based aggregate accruals2 2,615 328 2,483 240 (703)
Financial Ratio
Balance-sheet-based accruals ratio3 28.44% 4.25% 39.30% 4.84% -13.55%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Procter & Gamble Co. 3.17% 3.98% 4.39% -2.96%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Staples 3.77% 6.33% -1.67% -0.87% 200.00%

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 19,3868,884 = 10,502

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 10,5027,887 = 2,615

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 2,615 ÷ [(10,502 + 7,887) ÷ 2] = 28.44%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Estée Lauder Cos. Inc. deteriorated earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

Estée Lauder Cos. Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Net earnings attributable to The Estée Lauder Companies Inc. 1,006 2,390 2,870 684 1,785 1,108
Less: Net cash flows provided by operating activities 1,731 3,040 3,631 2,280 2,517 2,573
Less: Net cash flows (used for) provided by investing activities (3,217) (945) (1,864) (1,698) 473 (369)
Cash-flow-statement-based aggregate accruals 2,492 295 1,103 102 (1,205) (1,096)
Financial Ratio
Cash-flow-statement-based accruals ratio1 27.10% 3.82% 17.46% 2.06% -23.23%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Procter & Gamble Co. 1.81% 3.50% -1.84% -11.18%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Staples 3.53% 3.35% -7.03% -1.88% -2.87%

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 2,492 ÷ [(10,502 + 7,887) ÷ 2] = 27.10%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Estée Lauder Cos. Inc. deteriorated earnings quality from 2022 to 2023.