Estee Lauder Companies Inc (EL)
Liquidity ratios
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.39 | 1.58 | 1.36 | 1.45 | 1.46 | 1.46 | 1.66 | 1.68 | 1.60 | 1.75 | 1.73 | 1.78 | 1.84 | 2.12 | 1.90 | 1.85 | 1.72 | 1.63 | 1.69 | 1.53 |
| Quick ratio | 0.90 | 1.03 | 0.87 | 0.85 | 0.88 | 0.97 | 1.00 | 0.97 | 0.96 | 1.12 | 1.16 | 1.18 | 1.26 | 1.57 | 1.39 | 1.28 | 1.20 | 1.19 | 1.18 | 0.99 |
| Cash ratio | 0.60 | 0.68 | 0.60 | 0.52 | 0.65 | 0.72 | 0.66 | 0.56 | 0.68 | 0.71 | 0.80 | 0.75 | 0.94 | 1.23 | 1.03 | 0.90 | 0.97 | 0.86 | 0.73 | 0.49 |
Estee Lauder Companies Inc's liquidity ratios have shown some fluctuations over the past few quarters.
The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has varied between 1.36 and 1.78 over the past two years. The ratio has generally been above 1, indicating that the company has had sufficient current assets to cover its current liabilities. However, the ratio has been trending downwards, which may raise concerns about the company's ability to meet its short-term obligations in the future.
The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, has also shown fluctuations, ranging from 0.85 to 1.57 over the same period. Like the current ratio, the quick ratio has generally been above 1, indicating a relatively healthy liquidity position. However, the downward trend in this ratio is more pronounced compared to the current ratio, signaling a potential decrease in the company's ability to meet its short-term obligations using its most liquid assets.
The cash ratio, which is the most stringent measure of liquidity that only considers cash and cash equivalents, has fluctuated between 0.49 and 1.23 over the past two years. The ratio has generally been below 1, suggesting that the company may not have enough cash on hand to cover its current liabilities. However, the ratio has shown some improvement in recent quarters.
Overall, while Estee Lauder Companies Inc has maintained liquidity ratios above the threshold of 1 in most cases, the downward trends in the current and quick ratios raise some concerns about the company's ability to meet its short-term obligations using its current assets. It is important for the company to closely monitor its liquidity position and manage its working capital effectively to ensure it can meet its financial obligations in a timely manner.
See also:
Estee Lauder Companies Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 58.56 | 72.17 | 75.93 | 83.94 | 65.27 | 82.65 | 82.02 | 85.93 | 60.51 | 77.25 | 66.50 | 77.15 | 59.52 | 72.93 | 79.40 | 80.19 | 58.48 | 65.72 | 73.03 | 81.97 |
The cash conversion cycle of Estee Lauder Companies Inc has shown some fluctuations over the past several quarters. It is a metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From the data provided, we can observe that the cash conversion cycle has ranged from a low of 58.48 days to a high of 85.93 days over the past few quarters. A shorter cash conversion cycle is generally favorable as it indicates that the company is able to efficiently manage its working capital and generate cash flows from its operating activities.
The company experienced a decrease in its cash conversion cycle in the most recent quarter, which suggests an improvement in its working capital management practices. However, the overall trend appears to be somewhat volatile, with fluctuations in the cycle across different quarters.
It is important for Estee Lauder Companies Inc to focus on optimizing its cash conversion cycle to ensure efficient utilization of resources and maximize cash flow generation. By monitoring and analyzing this metric over time, the company can identify areas for improvement and implement strategies to streamline its operations and enhance its financial performance.