Estee Lauder Companies Inc (EL)

Financial leverage ratio

		Jun 30, 2025	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	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
Total assets	US$ in thousands	19,892,000	19,886,000	19,760,000	21,317,000	21,677,000	22,700,000	23,283,000	22,650,000	23,415,000	22,715,000	20,731,000	19,989,000	20,910,000	21,359,000	22,078,000	21,580,000	21,971,000	19,900,000	19,595,000	17,903,000
Total stockholders’ equity	US$ in thousands	3,865,000	4,345,000	4,169,000	5,084,000	5,314,000	5,744,000	5,712,000	5,342,000	5,585,000	5,877,000	5,902,000	5,517,000	5,590,000	6,150,000	6,218,000	6,081,000	6,057,000	5,528,000	5,421,000	4,452,000
Financial leverage ratio		5.15	4.58	4.74	4.19	4.08	3.95	4.08	4.24	4.19	3.87	3.51	3.62	3.74	3.47	3.55	3.55	3.63	3.60	3.61	4.02

June 30, 2025 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $19,892,000K ÷ $3,865,000K
= 5.15

The financial leverage ratio of Estee Lauder Companies Inc. has exhibited notable fluctuations over the analyzed period. Beginning at 4.02 as of September 30, 2020, the ratio showed a declining trend throughout the subsequent quarters, reaching a low of 3.47 by March 31, 2022. This decline indicates a reduction in the company's reliance on debt relative to its equity during this period, which could suggest efforts to deleverage or improved equity position.

However, from the second quarter of 2022 onward, the leverage ratio generally trended upward, indicating an increased degree of financial leverage. The ratio rose to 4.19 as of June 30, 2023, and continued its upward trajectory, reaching a peak of 4.74 by December 31, 2024. This increase signals a greater utilization of debt financing relative to equity, which could imply a strategic shift toward leveraging debt to fund growth initiatives, acquisitions, or share repurchases.

In the most recent period analyzed, the ratio stands at 5.15 as of June 30, 2025, reflecting a continued emphasis on leveraging, though the pace of increase has moderated compared to the previous period’s rapid rise. Overall, the company's leverage has increased significantly from the starting point in 2020, suggesting a balance sheet management approach that has shifted toward higher leverage levels in recent periods, potentially to enhance return on equity or fund expansion activities.