Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Estée Lauder Cos. Inc., liquidity 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).
- Current Ratio
- The current ratio exhibited minor fluctuations over the observed period. Initially, it showed a gradual increase from 1.75 in September 2017, peaking at 1.86 in June 2018, indicating enhanced short-term liquidity. Subsequently, it declined to a low near 1.46 by March and June 2023. Notably, there was a marked recovery during the end of 2020 and early 2021 period, where the ratio reached above 2.1 in March 2021, signaling improved ability to cover short-term obligations. However, the trend after that period shows a gradual weakening in liquidity through to mid-2023.
- Quick Ratio
- The quick ratio displays a pattern somewhat parallel to the current ratio but with generally lower values, reflecting a lesser proportion of highly liquid assets. From a starting point of 1.15 in late 2017, the ratio rose modestly, peaking at 1.57 in March 2021. Following this peak, it gradually decreased to below 1.0 by mid-2023, specifically down to 0.88. The decline suggests a reduced buffer of near-cash assets to cover immediate liabilities, with a notable dip below one indicating potential liquidity pressure in recent quarters.
- Cash Ratio
- The cash ratio, representing the most liquid form of assets relative to current liabilities, shows greater volatility throughout the timeframe. Beginning at 0.58 in late 2017, it moved upwards, reaching a peak of 1.23 in March 2021, indicating strong cash reserves relative to obligations at that point. After this peak, the ratio declined steadily, reaching 0.65 by June 2023. This downward trend signals a reduction in cash and cash-equivalents proportionate to current liabilities, potentially reflecting changes in cash management strategy or operational cash flows.
Current Ratio
Estée Lauder Cos. Inc., current ratio 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 assets | 9,139) | 11,247) | 9,367) | 8,866) | 9,298) | 9,500) | 9,955) | 9,486) | 9,768) | 10,997) | 10,291) | 8,795) | 8,892) | 9,233) | 8,348) | 7,022) | 7,212) | 7,160) | 6,440) | 6,249) | 6,168) | 6,169) | 5,975) | 5,507) | |||||||
| Current liabilities | 6,240) | 7,700) | 5,655) | 5,271) | 5,815) | 5,414) | 5,762) | 5,319) | 5,298) | 5,197) | 5,420) | 4,744) | 5,179) | 5,681) | 4,953) | 4,590) | 4,605) | 4,231) | 3,776) | 3,563) | 3,310) | 3,388) | 3,403) | 3,142) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||||
| Current ratio1 | 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 | 1.57 | 1.69 | 1.71 | 1.75 | 1.86 | 1.82 | 1.76 | 1.75 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||||||||
| Procter & Gamble Co. | 0.63 | 0.59 | 0.56 | 0.62 | 0.65 | 0.68 | 0.67 | 0.67 | 0.70 | 0.71 | 0.78 | 0.87 | 0.85 | 0.83 | 0.63 | 0.72 | 0.75 | 0.79 | 0.78 | 0.80 | — | — | — | — | |||||||
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
Current ratio = Current assets ÷ Current liabilities
= 9,139 ÷ 6,240 = 1.46
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable patterns in liquidity as measured by the current assets, current liabilities, and the current ratio over the observed periods.
- Current Assets
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Current assets demonstrate a general upward trend from September 2017 through December 2019, increasing from $5,507 million to $8,348 million. Subsequently, while some fluctuations occur, the asset base remains relatively elevated, peaking at $11,247 million in March 2023 before a decline to $9,139 million in June 2023. This suggests an overall growth in assets held in the short term, with notable increases in late 2020 and early 2021, likely reflecting operational scale or inventory buildup.
- Current Liabilities
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Current liabilities also show a rising trend from $3,142 million in September 2017 to $4,953 million at the end of 2019, followed by further growth through 2022, reaching as high as $7,700 million in March 2023. However, there is a subsequent decrease to $6,240 million by June 2023. The increase in liabilities is generally reflective of higher short-term obligations commensurate with business activity, though the spike in early 2023 may indicate increased payables or short-term debt obligations.
- Current Ratio
-
The current ratio exhibits a declining trend overall, starting at 1.75 in September 2017, falling to as low as 1.46 in March and June 2023. There is a temporary improvement period between December 2020 and March 2021, where the ratio peaks at 2.12, indicating a stronger liquidity position in that window. Yet, the general downward trajectory after mid-2021 suggests that liabilities have grown at a faster pace than current assets, signaling slightly diminished short-term financial flexibility in the most recent periods.
In summary, while current assets have generally increased over time, the parallel and sometimes more rapid increase in current liabilities has driven a reduction in the current ratio, thereby implying a less robust liquidity buffer in the most recent fiscal quarters. This pattern warrants attention to working capital management and the potential impacts on short-term solvency.
Quick Ratio
Estée Lauder Cos. Inc., quick ratio calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||||
| Cash and cash equivalents | 4,029) | 5,531) | 3,725) | 2,938) | 3,957) | 3,836) | 4,603) | 3,995) | 4,958) | 6,399) | 5,545) | 4,267) | 5,022) | 4,876) | 3,596) | 2,259) | 2,987) | 2,902) | 1,876) | 1,443) | 2,181) | 2,140) | 2,105) | 1,444) | |||||||
| Short-term investments | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 525) | 550) | 534) | 384) | 394) | 381) | |||||||
| Accounts receivable, net | 1,452) | 1,904) | 1,932) | 2,156) | 1,629) | 2,209) | 2,079) | 2,265) | 1,702) | 1,735) | 1,972) | 1,812) | 1,194) | 1,846) | 2,225) | 2,294) | 1,831) | 2,036) | 2,000) | 2,214) | 1,487) | 1,761) | 1,699) | 1,799) | |||||||
| Total quick assets | 5,481) | 7,435) | 5,657) | 5,094) | 5,586) | 6,045) | 6,682) | 6,260) | 6,660) | 8,134) | 7,517) | 6,079) | 6,216) | 6,722) | 5,821) | 4,553) | 4,818) | 4,938) | 4,401) | 4,207) | 4,202) | 4,285) | 4,198) | 3,624) | |||||||
| Current liabilities | 6,240) | 7,700) | 5,655) | 5,271) | 5,815) | 5,414) | 5,762) | 5,319) | 5,298) | 5,197) | 5,420) | 4,744) | 5,179) | 5,681) | 4,953) | 4,590) | 4,605) | 4,231) | 3,776) | 3,563) | 3,310) | 3,388) | 3,403) | 3,142) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||||
| Quick ratio1 | 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 | 1.18 | 1.18 | 0.99 | 1.05 | 1.17 | 1.17 | 1.18 | 1.27 | 1.26 | 1.23 | 1.15 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||||||||
| Procter & Gamble Co. | 0.38 | 0.34 | 0.33 | 0.34 | 0.37 | 0.41 | 0.44 | 0.44 | 0.45 | 0.46 | 0.53 | 0.61 | 0.62 | 0.61 | 0.38 | 0.48 | 0.51 | 0.53 | 0.55 | 0.56 | — | — | — | — | |||||||
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
Quick ratio = Total quick assets ÷ Current liabilities
= 5,481 ÷ 6,240 = 0.88
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibited a generally upward trend from September 2017 through March 2020, increasing from approximately 3,624 million USD to a peak of around 6,722 million USD. Following this peak, there was notable volatility with fluctuations across quarters. After declining somewhat during mid-2020, quick assets surged again near the end of 2020 and into early 2021, reaching a high of approximately 8,134 million USD in March 2021. Subsequently, the level of quick assets trended downward through most of 2021 and 2022, dropping to about 5,094 million USD by September 2022. The last few quarters showed some recovery, finishing at roughly 5,481 million USD in June 2023.
- Current Liabilities
- Current liabilities increased steadily from about 3,142 million USD in September 2017 to almost 5,681 million USD by March 2020. There was a modest decline during mid-2020, followed by a mixed performance through 2021, with values fluctuating between roughly 5,197 million and 5,762 million USD. In 2022, liabilities remained elevated, peaking at approximately 5,815 million USD in June and again hitting a higher peak of 7,700 million USD in March 2023 before dropping to 6,240 million USD in June 2023. This represents an overall increasing trend in current liabilities over the examined period, with the highest values observed in early 2023.
- Quick Ratio
- The quick ratio mostly remained above 1.0 throughout the period, indicating that quick assets generally exceeded current liabilities. From a ratio of 1.15 in late 2017, it slightly increased to around 1.27 in mid-2018. However, it dipped to just below 1.0 in September 2019 and then rose again, reaching a peak of about 1.57 in March 2021, signaling improved short-term liquidity during this quarter. After this high point, the quick ratio declined steadily, falling below 1.0 again by June 2022 and remaining near or just below 1.0 through mid-2023. The lowest recorded ratio was around 0.88 in June 2023, suggesting decreased liquidity relative to current liabilities in the most recent quarter.
- Overall Observations
- The data indicates periods of improving and then weakening liquidity over the examined time frame. While total quick assets and current liabilities both increased substantially from 2017 until roughly early 2020, the company's ability to cover short-term obligations with quick assets improved markedly in early 2021. However, after this peak, liquidity measures deteriorated, with quick assets declining and current liabilities rising sharply in early 2023, resulting in the quick ratio falling below 1.0 and indicating potential short-term liquidity pressure toward the most recent quarter. This trend highlights the importance of monitoring both assets and liabilities to assess the company's ongoing short-term financial stability.
Cash Ratio
Estée Lauder Cos. Inc., cash ratio 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) | |||||||||||||||||||||||||||||||
| Cash and cash equivalents | 4,029) | 5,531) | 3,725) | 2,938) | 3,957) | 3,836) | 4,603) | 3,995) | 4,958) | 6,399) | 5,545) | 4,267) | 5,022) | 4,876) | 3,596) | 2,259) | 2,987) | 2,902) | 1,876) | 1,443) | 2,181) | 2,140) | 2,105) | 1,444) | |||||||
| Short-term investments | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 525) | 550) | 534) | 384) | 394) | 381) | |||||||
| Total cash assets | 4,029) | 5,531) | 3,725) | 2,938) | 3,957) | 3,836) | 4,603) | 3,995) | 4,958) | 6,399) | 5,545) | 4,267) | 5,022) | 4,876) | 3,596) | 2,259) | 2,987) | 2,902) | 2,401) | 1,993) | 2,715) | 2,524) | 2,499) | 1,825) | |||||||
| Current liabilities | 6,240) | 7,700) | 5,655) | 5,271) | 5,815) | 5,414) | 5,762) | 5,319) | 5,298) | 5,197) | 5,420) | 4,744) | 5,179) | 5,681) | 4,953) | 4,590) | 4,605) | 4,231) | 3,776) | 3,563) | 3,310) | 3,388) | 3,403) | 3,142) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||||
| Cash ratio1 | 0.65 | 0.72 | 0.66 | 0.56 | 0.68 | 0.71 | 0.80 | 0.75 | 0.94 | 1.23 | 1.02 | 0.90 | 0.97 | 0.86 | 0.73 | 0.49 | 0.65 | 0.69 | 0.64 | 0.56 | 0.82 | 0.74 | 0.73 | 0.58 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||||||||
| Procter & Gamble Co. | 0.23 | 0.20 | 0.18 | 0.18 | 0.22 | 0.25 | 0.30 | 0.28 | 0.31 | 0.31 | 0.38 | 0.45 | 0.49 | 0.47 | 0.21 | 0.31 | 0.34 | 0.35 | 0.39 | 0.39 | — | — | — | — | |||||||
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
Cash ratio = Total cash assets ÷ Current liabilities
= 4,029 ÷ 6,240 = 0.65
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets demonstrate a generally fluctuating pattern with notable peaks and troughs over the observed quarters. Starting at 1,825 million USD in September 2017, cash assets rise steadily to a significant high of 5,022 million USD by June 2020. After this peak, there is a decline with some volatility, including a drop to 2,938 million USD by September 2022, before rebounding to 5,531 million USD in March 2023 and then declining again to 4,029 million USD by June 2023. Overall, the trend indicates phases of accumulation and drawdown, possibly reflecting operational cycles or strategic liquidity management.
- Current Liabilities
- Current liabilities exhibit a persistent upward trajectory throughout the period. Starting at 3,142 million USD in September 2017, liabilities increase consistently through the quarters, reaching the highest value of 7,700 million USD in March 2023. This growth in liabilities, almost doubling over the timeframe, may suggest increased operational expenses, working capital needs, or other obligations. Although there are minor fluctuations, the general trend is one of increasing short-term financial commitments.
- Cash Ratio
- The cash ratio shows considerable variation over time, oscillating between 0.49 and 1.23. Initially, the ratio improves from 0.58 in September 2017 to a peak of 1.23 in March 2021, indicating stronger liquidity as cash assets relative to current liabilities increased. However, following this peak, the ratio declines steadily to 0.56 by September 2022, indicating a reduction in cash coverage of current liabilities. Subsequently, a slight recovery leads to a ratio of 0.72 in March 2023, followed by a minor decline to 0.65 in June 2023. These fluctuations suggest changing liquidity management strategies and varying ability to cover short-term obligations solely with cash assets.
- Overall Insights
- The financial data reveals complex liquidity dynamics. Total cash assets reach their highest point around mid-2020, aligning with a peak in the cash ratio, which implies a period of strong cash reserves relative to liabilities. The subsequent increase in current liabilities outpaces the growth in cash assets, causing a decline in the cash ratio in the later quarters. Despite this, the company maintains cash ratios largely below or near 1, indicating cash reserves are generally sufficient to cover a portion but not all current liabilities without considering other liquid assets. The volatility in cash assets coupled with steadily rising liabilities could reflect strategic liquidity management in response to operational demands, market conditions, or investment activities.