Stock Analysis on Net
Stock Analysis on Net

Estée Lauder Cos. Inc. (NYSE:EL)

$22.49

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

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

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Economic Profit

Estée Lauder Cos. Inc., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

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 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Estée Lauder Cos. Inc. economic profit decreased from 2021 to 2022 and from 2022 to 2023.

Net Operating Profit after Taxes (NOPAT)

Estée Lauder Cos. Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: 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.
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for credit losses2
Increase (decrease) in deferred revenue3
Increase (decrease) in accrued restructuring charges4
Increase (decrease) in equity equivalents5
Interest expense
Interest expense, operating lease liability6
Adjusted interest expense
Tax benefit of interest expense7
Adjusted interest expense, after taxes8
(Gain) loss on marketable securities
Investment income, before taxes
Tax expense (benefit) of investment income9
Investment income, after taxes10
Net income (loss) attributable to noncontrolling interest
Net operating profit after taxes (NOPAT)

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 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for credit losses.

3 Addition of increase (decrease) in deferred revenue.

4 Addition of increase (decrease) in accrued restructuring charges.

5 Addition of increase (decrease) in equity equivalents to net earnings attributable to The Estée Lauder Companies Inc..

6 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

7 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

8 Addition of after taxes interest expense to net earnings attributable to The Estée Lauder Companies Inc..

9 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

10 Elimination of after taxes investment income.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Estée Lauder Cos. Inc. NOPAT decreased from 2021 to 2022 and from 2022 to 2023.

Cash Operating Taxes

Estée Lauder Cos. Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Provision for income taxes
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense
Less: Tax imposed on investment income
Cash operating taxes

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).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Estée Lauder Cos. Inc. cash operating taxes increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Invested Capital

Estée Lauder Cos. Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Current debt
Long-term debt, excluding current maturities
Operating lease liability1
Total reported debt & leases
Stockholders’ equity, The Estée Lauder Companies Inc.
Net deferred tax (assets) liabilities2
Allowance for credit losses3
Deferred revenue4
Accrued restructuring charges5
Equity equivalents6
Accumulated other comprehensive (income) loss, net of tax7
Redeemable noncontrolling interest
Noncontrolling interests
Adjusted stockholders’ equity, The Estée Lauder Companies Inc.
Construction in progress8
Available-for-sale investments9
Invested capital

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 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of deferred revenue.

5 Addition of accrued restructuring charges.

6 Addition of equity equivalents to stockholders’ equity, The Estée Lauder Companies Inc..

7 Removal of accumulated other comprehensive income.

8 Subtraction of construction in progress.

9 Subtraction of available-for-sale investments.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Estée Lauder Cos. Inc. invested capital decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Cost of Capital

Estée Lauder Cos. Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Current and long-term debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2023-06-30).

1 US$ in millions

2 Equity. See details »

3 Current and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Current and long-term debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2022-06-30).

1 US$ in millions

2 Equity. See details »

3 Current and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Current and long-term debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2021-06-30).

1 US$ in millions

2 Equity. See details »

3 Current and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Current and long-term debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2020-06-30).

1 US$ in millions

2 Equity. See details »

3 Current and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Current and long-term debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2019-06-30).

1 US$ in millions

2 Equity. See details »

3 Current and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Current and long-term debt3 ÷ = × × (1 – 28.10%) =
Operating lease liability4 ÷ = × × (1 – 28.10%) =
Total:

Based on: 10-K (reporting date: 2018-06-30).

1 US$ in millions

2 Equity. See details »

3 Current and long-term debt. See details »

4 Operating lease liability. See details »

Economic Spread Ratio

Estée Lauder Cos. Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data (US$ in millions)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Procter & Gamble Co.

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 Economic profit. See details »

2 Invested capital. See details »

3 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Estée Lauder Cos. Inc. economic spread ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Economic Profit Margin

Estée Lauder Cos. Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data (US$ in millions)
Economic profit1
 
Net sales
Add: Increase (decrease) in deferred revenue
Adjusted net sales
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Procter & Gamble Co.

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 Economic profit. See details »

2 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × ÷ =

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Estée Lauder Cos. Inc. economic profit margin deteriorated from 2021 to 2022 and from 2022 to 2023.