Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Price to Earnings (P/E) since 2005
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Solvency Ratios (Summary)
Estée Lauder Cos. Inc., solvency ratios (quarterly data)
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
The analysis highlights several observable trends in the company's leverage and coverage ratios over the examined period.
- Debt to Equity Ratio
-
This ratio remained relatively stable around the 0.7 to 0.8 range from late 2017 to late 2019, indicating steady leverage levels. However, there was a marked increase starting in December 2019, peaking at 1.56 in June 2020, suggesting a reliance on more debt during this period. Following this peak, the ratio declined to below 1.0 in late 2021 and early 2022, indicating deleveraging efforts before rising again towards 1.45 in mid-2023.
- Debt to Equity (Including Operating Lease Liability)
-
Similar in trend to the traditional debt to equity ratio but consistently higher, this measure reflects additional liabilities from operating leases. The ratio jumped notably from 0.78 in June 2019 to 2.23 in June 2020, highlighting significant lease obligations impacting leverage. It subsequently decreased to around 1.28 by late 2021 but trended upwards again to reach 1.82 in mid-2023.
- Debt to Capital Ratio
-
Measured debt as a proportion of the company’s total capital was steady around 0.43 to 0.45 until the end of 2019. Beginning 2020, it rose sharply to 0.61 by June 2020, correlating with increased debt levels. This ratio moderated slightly in late 2020 and 2021, fluctuating around 0.48 to 0.52, with a renewed increase approaching 0.59 in mid-2023.
- Debt to Capital (Including Operating Lease Liability)
-
This ratio mirrored the previous pattern but at higher levels, rising from approximately 0.44 in 2017-2019 to a peak of 0.69 in June 2020. It then declined through 2021, moving between 0.56 and 0.61, and experienced an upward shift in 2023 to around 0.65.
- Debt to Assets Ratio
-
This ratio exhibited a gradual decline from 0.32 in late 2017 to approximately 0.22 by September 2019, indicating a relative reduction in debt compared to total assets. However, starting in late 2019, the ratio increased steadily to 0.35 by mid-2020, then fluctuated between 0.25 and 0.3 during 2021 and 2022 before increasing again to 0.35 by mid-2023.
- Debt to Assets (Including Operating Lease Liability)
-
Accounting for operating lease liabilities, this ratio followed a similar trend but at elevated levels, rising from about 0.3 in earlier years to almost 0.5 by mid-2020. It then dropped somewhat in 2021 to the high 0.3 range and climbed to 0.43 by mid-2023.
- Financial Leverage
-
This ratio increased from the mid-2 range in late 2017 to above 4.5 by mid-2020, reflecting an increase in the use of debt relative to equity. Subsequently, the financial leverage decreased to approximately 3.5 in late 2021 but showed a renewed increase back above 4.1 by mid-2023.
- Interest Coverage Ratio
-
Data for interest coverage began in March 2018 with a high ratio exceeding 16, indicating strong ability to cover interest expenses. This ratio peaked at over 25 in mid-2022, reflecting improved earnings relative to interest costs. However, it declined sharply starting in late 2022, falling to 6.48 by mid-2023, suggesting a weakening in earnings support for interest payments.
Overall, the data depict a period of increased leverage and financial risk around 2020, coinciding with heightened debt and lease obligations. Although reductions in leverage occurred afterward, leverage ratios began rising again in 2023. Interest coverage’s initial robustness deteriorated significantly in the most recent quarters, potentially signaling challenges in operational earnings or increased interest expenses. The inclusion of operating lease liabilities consistently elevates leverage measurements, underscoring their material impact on the company’s financial structure.
Debt Ratios
Coverage Ratios
Debt to Equity
Estée Lauder Cos. Inc., debt to equity calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||||||||||
| Long-term debt, excluding current maturities | |||||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||||
| Stockholders’ equity, The Estée Lauder Companies Inc. | |||||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||||||||
| Procter & Gamble Co. | |||||||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q4 2023 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity, The Estée Lauder Companies Inc.
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt figures demonstrate a general upward trend over the periods analyzed. Initially, the debt decreased steadily from 3,935 million USD in September 2017 to 3,391 million USD by December 2018. However, beginning in December 2019, there is a sharp increase, peaking at 6,201 million USD. After a slight reduction and fluctuations in 2020 and 2021, debt levels again rise substantially toward the end of the dataset, reaching a high of 8,114 million USD by June 2023. This pattern indicates fluctuating borrowing activity with a pronounced increase in liabilities during and after 2019.
- Stockholders’ Equity
- Stockholders’ equity shows a relatively stable trajectory with moderate fluctuations. There is a mild decline from 4,731 million USD in September 2017 to a low of 4,306 million USD by December 2018. Subsequently, equity experiences a recovery phase, increasing notably in late 2020 through 2021, reaching a peak of 6,218 million USD in December 2021. Post-2021, equity declines slightly but remains above 5,500 million USD through mid-2023. Overall, equity maintains a positive trend, suggesting retained earnings or other equity enhancements offsetting liabilities.
- Debt to Equity Ratio
- The debt to equity ratio depicts the relationship between the company’s debt levels and shareholders' equity, reflecting financial leverage changes. Initially, between 2017 and mid-2018, the ratio remains below 1, oscillating around 0.75-0.83, indicating moderate leverage. Beginning in the last quarter of 2019, the ratio spikes sharply to 1.13 and continues rising to a peak of 1.56 in June 2020, suggesting a significant increase in financial leverage relative to equity. Following this peak, the ratio partially decreases and fluctuates around 0.9 to 1.1 through 2021 and 2022, reflecting a period of relative stabilization in leverage. By mid-2023, leverage rises again markedly to 1.45, highlighting increased reliance on debt financing relative to equity.
Debt to Equity (including Operating Lease Liability)
Estée Lauder Cos. Inc., debt to equity (including operating lease liability) calculation (quarterly data)
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q4 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity, The Estée Lauder Companies Inc.
= ÷ =
- Total Debt (including operating lease liability)
- The total debt shows a general upward trend over the observed periods. Initially, the debt starts at $3,935 million in September 2017 and decreases steadily until mid-2018, reaching $3,544 million at June 30, 2018. Subsequently, there is a notable sharp increase beginning in September 2019, with debt nearly doubling by the end of that year, peaking at $7,871 million in December 2019. Following this peak, the debt remains elevated with slight fluctuations, staying within the $7,000 to $8,500 million range until mid-2023. The most recent figures in 2023 indicate another increase reaching above $10,000 million by June 30, 2023.
- Stockholders’ Equity
- The stockholders’ equity displays fluctuations but with a moderately increasing pattern over time. Starting at $4,731 million in September 2017, equity declined somewhat toward the end of 2018, reaching a low of $4,306 million in December 2018. After this point, equity rises significantly, peaking at $6,218 million by December 2021. However, from 2022 onwards, equity demonstrates a declining trend, falling back to around $5,585 million by June 2023, indicating some erosion in equity in the most recent periods covered.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio reflects the leverage dynamics of the company. This ratio was relatively stable and below 1.0 through mid-2019, indicating moderate leverage with values fluctuating between 0.74 and 0.83. A sharp increase is observed starting from September 2019, reaching a peak ratio of 2.23 in June 2020. This signals a significant increase in debt relative to equity during this period. Following this spike, the ratio declines but remains elevated between approximately 1.27 and 1.54 through 2021 and early 2022. Toward the latter part of the timeline, particularly into 2023, the leverage ratio increases again, nearing 1.82, indicating a return to higher leverage levels.
Debt to Capital
Estée Lauder Cos. Inc., debt to capital calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||||||||||
| Long-term debt, excluding current maturities | |||||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||||
| Stockholders’ equity, The Estée Lauder Companies Inc. | |||||||||||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||||||||
| Procter & Gamble Co. | |||||||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q4 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a general decline from September 2017 through September 2019, decreasing from 3,935 million USD to around 3,415 million USD. However, from December 2019 onwards, there is a significant increase, peaking at 6,201 million USD at the end of that year and remaining elevated through 2020. After a slight decrease during 2020 and the first half of 2021, the debt level fluctuates in the range of approximately 5,370 to 5,960 million USD. Starting from the last quarter of 2022, the total debt increases sharply again, reaching the highest recorded figure of 8,114 million USD by mid-2023.
- Total Capital
- Total capital mirrors some of the debt trends but with less pronounced fluctuation. It trends downward from 8,666 million USD in September 2017 to a low of 7,697 million USD in December 2018. Subsequently, it experiences growth, climbing to 11,749 million USD by the end of 2021. In 2022 and into the first half of 2023, total capital continues to increase, reaching 13,699 million USD, indicating an overall expansion in the capital base over the observed periods.
- Debt to Capital Ratio
- This ratio remains relatively stable but variable around 0.43 to 0.45 until September 2019, suggesting a consistent leverage position during that period. Beginning in late 2019, the ratio experiences a marked increase to a peak of 0.61 in mid-2020, indicating higher leverage concurrent with the spike in total debt. Following this peak, the ratio gradually decreases to the 0.47-0.49 range through 2021 and most of 2022, denoting some deleveraging. Toward the end of 2022 and into 2023, the ratio rises again to 0.59, reflecting renewed increased leverage consistent with the rising debt levels.
- Overall Analysis
- Over the full period, the data reveals two distinct phases of leverage change. Initially, leverage decreased due to lowering total debt and stabilizing capital. Then, in late 2019 and throughout 2020, a substantial increase in debt led to elevated leverage ratios. Following a partial reduction in leverage during 2021 and mid-2022, leverage escalated again markedly in late 2022 into 2023. Concurrently, total capital has exhibited a gradual growth trend, suggesting ongoing capital investment or equity growth. The financial posture appears responsive to varying conditions, with leverage levels adapting alongside fluctuations in debt and capital.
Debt to Capital (including Operating Lease Liability)
Estée Lauder Cos. Inc., debt to capital (including operating lease liability) calculation (quarterly data)
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q4 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited an overall increasing trend over the periods analyzed. Starting at $3,935 million in September 2017, it generally declined until June 2019, reaching a low around $3,412 million. From September 2019 onward, debt levels increased sharply, peaking at $10,169 million by June 2023. This increase is particularly notable from the end of 2019 through mid-2023, indicating a substantial rise in leverage or financing obligations.
- Total Capital (Including Operating Lease Liability)
- Total capital showed moderate fluctuations but a general upward trajectory across the timeframe. It began at $8,666 million in September 2017, then initially declined modestly through late 2018 to approximately $7,697 million by December 2018. A marked increase occurred starting September 2019, rising from $10,626 million to a peak of $15,754 million by June 2023. This suggests an expansion of the company's capital base, possibly driven by increased debt or equity financing.
- Debt to Capital Ratio (Including Operating Lease Liability)
- The debt to capital ratio started at 0.45 in September 2017, exhibiting relative stability with minor fluctuations below 0.45 until mid-2019. From September 2019 onward, there was a pronounced increase in the ratio, peaking at 0.69 in June 2020, indicating a higher proportion of debt relative to capital during this period. After June 2020, the ratio declined but remained elevated compared to earlier years, oscillating between 0.56 and 0.65 up to June 2023. This pattern reflects a more leveraged capital structure, with debt constituting a larger fraction of total capital in most recent periods compared to the earlier years.
Debt to Assets
Estée Lauder Cos. Inc., debt to assets calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||||||||||
| Long-term debt, excluding current maturities | |||||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||||||||
| Procter & Gamble Co. | |||||||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q4 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's debt and asset structure over the observed periods.
- Total Debt
- The total debt demonstrates a general upward trajectory across the quarters. Starting from approximately $3.9 billion in late 2017, the debt levels exhibit moderate fluctuations but maintain an overall increase. A marked rise is observed nearing the end of 2019, where debt jumps to over $5.1 billion and peaks in the first half of 2023 at over $8.1 billion. This indicates a significant increase in leverage in recent years.
- Total Assets
- Total assets steadily increase from about $12.2 billion in late 2017 to reach around $23.4 billion by mid-2023. The growth is relatively consistent with some periods of faster expansion, particularly from late 2019 onwards. The asset base nearly doubles over the span of the data, suggesting ongoing investment and expansion activities.
- Debt to Assets Ratio
- The debt to assets ratio fluctuates within a range of approximately 0.25 to 0.35 throughout the observed periods. Initially, a declining trend is noticeable through 2017 and early 2018, indicating a reduction in leverage relative to assets. However, from late 2019, the ratio increases, paralleling the rise in total debt, and stabilizes around the higher end of the range by 2023. This points to a cautious yet increased reliance on debt financing relative to the asset base in recent years.
In summary, the company has experienced significant growth in both assets and total debt over the analyzed quarters. While the asset growth supports the increased debt levels, the elevation in the debt to assets ratio towards the later quarters suggests a strategic shift towards greater leverage. The financial stance indicates an emphasis on expansion financed in part by increased borrowing, with careful management to maintain leverage within moderate bounds.
Debt to Assets (including Operating Lease Liability)
Estée Lauder Cos. Inc., debt to assets (including operating lease liability) calculation (quarterly data)
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q4 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
- Total Debt (Including Operating Lease Liability)
- The total debt levels initially show a declining trend from September 2017 (US$3,935 million) through to December 2018 (US$3,391 million). From early 2019, however, total debt begins a significant increase, peaking notably in the December 2019 quarter at US$7,871 million, followed by a continued rise with some fluctuations up to June 2023, reaching US$10,169 million. This suggests a substantial buildup of liabilities, particularly from late 2019 onward.
- Total Assets
- Total assets exhibit a generally upward trajectory over the period analyzed. Starting from US$12,202 million in September 2017, assets steadily increase with some moderation around mid-2020 but overall continue rising through to June 2023, ending at US$23,415 million. The growth in assets indicates ongoing expansion or acquisition activity despite periods of volatility.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio declines gradually from 0.32 in September 2017 to a low of 0.26 in mid-2019, reflecting a more conservative leverage position relative to asset growth in that time frame. However, starting late 2019, the ratio increases sharply, peaking at 0.49 in June 2020. Following this peak, the ratio decreases somewhat but remains elevated compared to earlier years, fluctuating around 0.36-0.43 through to mid-2023. This pattern reveals a significant increase in leverage during the 2019-2020 period with persistent elevated leverage levels thereafter.
- Key Insights and Trends
- Overall, the data indicate a period of modest debt reduction and asset growth up to late 2018, followed by a pronounced increase in debt coinciding with accelerated asset expansion starting around late 2019. The elevated debt to assets ratio from late 2019 onwards points to a strategic use of leverage that may correspond with investment or operational changes. While asset growth has moderated somewhat in recent quarters, the leverage level remains higher than in the earlier period, suggesting sustained reliance on debt financing.
Financial Leverage
Estée Lauder Cos. Inc., financial leverage calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||||
| Stockholders’ equity, The Estée Lauder Companies Inc. | |||||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||||||||
| Procter & Gamble Co. | |||||||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q4 2023 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity, The Estée Lauder Companies Inc.
= ÷ =
2 Click competitor name to see calculations.
- Total assets
- The total assets showed a generally increasing trend over the observed periods. Starting at $12,202 million in September 2017, the figure rose steadily with some fluctuations, reaching a peak of $23,415 million in June 2023. Notable increases occurred around the periods ending September 2019 to December 2019 and from December 2020 onward, indicating periods of asset growth possibly linked to business expansion or acquisitions.
- Stockholders’ equity
- Stockholders' equity displayed a more variable pattern. Beginning at $4,731 million in September 2017, the value exhibited some decline until around June 2020, reaching as low as $3,935 million. Subsequently, equity increased markedly to $6,218 million by December 2021 before experiencing some declines again toward June 2023, ending at $5,585 million. The fluctuations suggest periods of variable profitability, dividend payments, share repurchases, or capital structure adjustments.
- Financial leverage
- The financial leverage ratio, which indicates the extent of company indebtedness relative to its equity, showed an overall increasing tendency. Starting at 2.58 in September 2017, the ratio climbed to a high of 4.52 by June 2020, reflecting increased use of debt compared to equity during this period. After mid-2020, the ratio decreased somewhat but remained elevated relative to the early years, settling around 4.19 by June 2023. The elevated leverage levels from 2019 onwards indicate heavier reliance on external financing, which may imply greater financial risk but also potential for enhanced returns.
- Summary insights
- The company’s asset base expanded substantially over the period, doubling from 2017 to 2023. Equity levels experienced more volatility, with a dip preceding mid-2020 followed by a recovery and subsequent fluctuations. The increase in financial leverage especially after 2018 suggests a strategic shift towards higher debt financing. This combination suggests the company pursued growth possibly funded via increased borrowing, impacting the capital structure with greater financial risk exposure while expanding asset capacity.
Interest Coverage
Estée Lauder Cos. Inc., interest coverage calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to The Estée Lauder Companies Inc. | |||||||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||||||||||||
| Add: Interest expense | |||||||||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||||||||
| Procter & Gamble Co. | |||||||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q4 2023 Calculation
Interest coverage
= (EBITQ4 2023
+ EBITQ3 2023
+ EBITQ2 2023
+ EBITQ1 2023)
÷ (Interest expenseQ4 2023
+ Interest expenseQ3 2023
+ Interest expenseQ2 2023
+ Interest expenseQ1 2023)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT figures exhibit a fluctuating pattern over the observed periods. Initial quarters show relatively strong results, with peaks around late 2017 and late 2018. Starting from early 2019, a significant decline is visible, reaching a pronounced trough in the second quarter of 2020, indicated by negative EBIT. Subsequently, a recovery phase occurs with fluctuating but generally improved values through late 2021 and early 2022. In the last several quarters, EBIT again shows volatility and a decreasing trend, ending with relatively modest figures in mid-2023.
- Interest expense
- Interest expense displays a gradual upward trend over the full period. Starting at a lower base of around 30 million USD, this expense steadily increases, accelerating notably from late 2019 onward and reaching its highest observed levels in mid-2023. This suggests increased borrowing costs or higher debt levels during the latter periods.
- Interest coverage
- The interest coverage ratio demonstrates a variable pattern closely linked to movements in EBIT and interest expenses. Early data points are absent, but from early 2018 onwards, the ratio is high, peaking around the end of 2021, reflecting strong EBIT relative to interest expenses. However, a decline is noted starting in early 2022, with the ratio falling from above 20 down to around 6.5 by mid-2023. This decrease reflects the combined impact of reduced EBIT and rising interest expenses, indicating a weakening ability to cover interest payments from operating earnings.