Estee Lauder Companies Inc (EL)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 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 |
The data indicates that Estee Lauder Companies Inc. exhibits a consistent pattern of zero debt ratios across multiple periods. Specifically, the debt-to-assets, debt-to-capital, and debt-to-equity ratios are all positioned at 0.00 from September 30, 2020, through June 30, 2025. These ratios suggest that the company has not employed leverage or debt financing within this timeframe or maintains negligible levels of debt relative to its assets and capital structure.
Alongside these debt ratios, the company's financial leverage ratio provides additional insight into its capital structure. The leverage ratio fluctuates within a relatively narrow range, starting at 4.02 as of September 30, 2020, and trending upward to 5.15 by June 30, 2025. These values imply that while the company does not utilize debt, its total assets are consistently financed primarily through equity or retained earnings, with the leverage ratio reflecting the degree of asset utilization relative to equity.
Overall, the data suggests that Estee Lauder Companies Inc. maintains an entirely equity-financed capital structure, with no reliance on debt. This positions the company as highly solvent, exhibiting a conservative leverage approach that minimizes financial risk related to debt obligations. The increasing trend in the financial leverage ratio, albeit within a generally stable range, indicates a gradual expansion in asset base or operational scale without necessitating additional debt financing.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 0.32 | 1.55 | 2.13 | 2.63 | 3.03 | 3.53 | 3.28 | 3.50 | 6.24 | 8.10 | 10.87 | 16.44 | 18.56 | 24.83 | 24.06 | 22.48 | 20.82 | 10.96 | 9.94 | 9.41 |
The interest coverage ratio for Estee Lauder Companies Inc., as of September 30, 2020, was 9.41, indicating the company generated approximately 9.41 times its interest expense from its earnings before interest and taxes (EBIT). Over the subsequent periods, this ratio experienced notable fluctuations.
Between September 2020 and March 2021, the ratio increased modestly from 9.41 to 10.96, suggesting an improvement in the company's ability to meet its interest obligations. This upward trend continued significantly during the second quarter of 2021, reaching a peak of 22.48 as of September 30, 2021. Such a high ratio reflects a strong buffer of earnings relative to interest obligations, indicating robust profitability during that period.
However, starting in the third quarter of 2021, a downward trend commenced. By December 31, 2021, the ratio had decreased to 24.06, and this decline persisted through 2022 and into 2023. By March 31, 2022, the ratio was 24.83, but it began to decline thereafter, dropping to 18.56 in June 2022 and further declining to 16.44 by September 2022. The downward trend continued into 2023, with the ratio reaching 10.87 at year-end, and subsequently decreasing to 8.10 in March 2023, 6.24 in June 2023, and 3.50 in September 2023.
The ratio remained relatively low in late 2023 and early 2024, with values of 3.28 (December 2023), 3.53 (March 2024), and around 3.03 to 2.63 during the subsequent quarters. The most recent estimates forecast a further decline, with the ratio expected to fall below 1 by mid-2025, reaching approximately 0.32 by June 2025.
Overall, the data indicates that Estee Lauder Companies’ ability to cover its interest expenses has substantially decreased over the analyzed period. The significant decline from over 20 in 2021 to below 4 by late 2023 suggests a weakening in earnings relative to interest obligations, raising potential concerns about financial leverage and interest risk, particularly if trends continue.