Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
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Long-term Activity Ratios (Summary)
Estée Lauder Cos. Inc., long-term (investment) activity 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).
- Net Fixed Asset Turnover
-
This ratio exhibits a generally declining trend over the observed periods. Starting at a high of 7.58 in late 2018, the ratio fluctuates moderately around the 7.2 to 7.7 range through mid-2019, before beginning a steady decline from late 2019 onwards. By mid-2023, the ratio has decreased significantly to 5.00, indicating lower revenue generation per unit of net fixed assets over time.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
-
This measure shows a notable decrease beginning in the period ending September 2019, dropping from 7.19 to approximately 3.36, likely reflecting changes in accounting standards related to lease capitalization. Following this sharp decline, the ratio remains relatively stable with a slight upward trend, peaking around 4.00 in early 2022 before decreasing again towards 3.20 by mid-2023. This pattern suggests the impact of including right-of-use assets significantly alters the turnover calculation, and the company has seen only modest recoveries in efficiency related to these assets over the period.
- Total Asset Turnover
-
The total asset turnover ratio reveals a downward trend across the entire timeframe. Initially stable around 1.11 to 1.13 through early 2019, it then decreases steadily, hitting lows around 0.68 by mid-2023. This reflects diminishing efficiency in generating sales from total assets, with a notable drop beginning in late 2018 and persisting over the subsequent years, suggesting challenges in asset utilization or sales growth relative to asset base expansion.
- Equity Turnover
-
This ratio shows some variability but generally trends lower in the most recent periods compared to earlier years. It peaked at 3.63 around mid-2020 after a gradual increase from 3.16 at the end of 2018. Thereafter, it declined to about 2.62 by late 2020, followed by a modest recovery reaching roughly 3.17 by mid-2022. However, it decreased again towards 2.85 by mid-2023. The fluctuations suggest varying efficiency in using shareholders' equity to generate revenue, with some recovery attempts but no sustained improvement during the last two years.
Net Fixed Asset Turnover
Estée Lauder Cos. Inc., net fixed asset turnover 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||||
| Property, plant and equipment, net | ||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||
| Net fixed asset turnover1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Net Fixed Asset Turnover, 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).
1 Q4 2023 Calculation
Net fixed asset turnover
= (Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023
+ Net salesQ1 2023)
÷ Property, plant and equipment, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrated a generally fluctuating pattern over the observed periods. Beginning at $3,524 million in September 2018, sales increased steadily to a peak of $4,624 million by December 2019. This was followed by a significant decline reaching the lowest point of $2,430 million in June 2020, likely reflecting external market or economic disruptions. Subsequent quarters showed a recovery trend, with net sales rising again to a new high of $5,539 million in December 2021. However, from this peak, net sales experienced a gradual decline, stabilizing around $3,600 to $3,900 million from early 2022 through mid-2023.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment exhibited a consistent upward trend throughout the periods. Starting at $1,838 million in September 2018, it gently increased with minor fluctuations, reaching $3,179 million by June 2023. This steady increase suggests continued investment in fixed assets and possibly expansions or upgrades in operational capacity.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which measures efficiency in generating sales from fixed assets, showed a distinct declining trend over the timeline. The ratio began at 7.58 in September 2018, indicating high efficiency. While there were minor fluctuations and a relatively stable phase around 7.2 during 2019 to 2021, the ratio progressively decreased thereafter, falling to 5.00 by June 2023. This decline suggests that the increase in fixed assets has not been matched by proportional sales growth in recent years, potentially indicating lower asset utilization or overinvestment in fixed assets relative to sales.
- Overall Insights
- The financial data reveals a business that expanded its asset base quite steadily while experiencing variable sales performance marked by periods of strong growth and significant downturns. The declining net fixed asset turnover ratio implies a reduced efficiency in employing fixed assets to generate sales, warranting further examination on asset management or sales strategies. The sales recovery after mid-2020 indicates resilience, but the subsequent downward trend highlights challenges in sustaining growth momentum.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Estée Lauder Cos. Inc., net fixed asset turnover (including operating lease, right-of-use asset) 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).
1 Q4 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset)
= (Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023
+ Net salesQ1 2023)
÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ( + + + )
÷ =
- Net Sales
- Net sales demonstrated a cyclical pattern with notable fluctuations over the periods. The data from late 2018 to early 2020 shows a general upward trend, peaking at 4,624 million USD in December 2019. However, a significant decline occurred during the first half of 2020, reaching a low point of 2,430 million USD in June 2020, which aligns with global economic disruptions. Following this trough, net sales rebounded strongly, achieving a peak of 5,539 million USD in December 2021. After this peak, sales declined again through mid-2023, though levels remained higher than pre-pandemic lows, suggesting some recovery but increased volatility.
- Property, Plant and Equipment, Net (Including Operating Lease, Right-of-Use Asset)
- The net value of property, plant, and equipment remained relatively stable from late 2018 through early 2019, ranging around 1,838 to 2,068 million USD. A sharp increase occurred in September 2019, jumping to 4,534 million USD, which then stabilized around the 4,500 million USD mark for subsequent periods. Minor fluctuations occurred afterward, with a general slight upward trend continuing into 2023, culminating near 4,976 million USD. This increase might reflect asset acquisitions or adjustments related to operating leases and right-of-use assets, indicating capital investment and leasing activity growth.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The net fixed asset turnover ratio experienced a distinct change corresponding to the increase in net fixed assets. Initially, from late 2018 to mid-2019, the ratio remained high and stable, fluctuating around 7.2 to 7.7. With the significant expansion in fixed assets in late 2019, the turnover ratio dropped precipitously to about 3.3, reflecting the denominator effect of increased asset base outpacing sales growth. From 2020 onwards, the ratio showed gradual improvement, reaching approximately 4 by early 2022, before declining again to around 3.2 by mid-2023. The variations indicate changing efficiency in generating sales relative to the invested asset base, with a notable decrease in turnover efficiency linked to the asset base increase and sales volatility.
Total Asset Turnover
Estée Lauder Cos. Inc., total asset turnover 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||
| Total asset turnover1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Total Asset Turnover, 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).
1 Q4 2023 Calculation
Total asset turnover
= (Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023
+ Net salesQ1 2023)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales displayed a fluctuating pattern over the periods analyzed. Starting at $3,524 million in September 2018, sales generally increased until reaching a peak of $4,624 million in December 2019. Following this peak, a significant decline occurred in early 2020, hitting a low of $2,430 million in June 2020, likely influenced by external economic factors impacting demand. Subsequently, sales rebounded robustly, reaching an all-time high of $5,539 million in December 2021. After this peak, net sales showed a downward correction, stabilizing between $3,600 million and $4,600 million in 2022 and mid-2023, indicating some volatility but maintaining a generally healthy sales level.
- Total Assets
- Total assets exhibited a consistent upward trend throughout the time frame. Beginning at $12,543 million in September 2018, total assets grew steadily, with occasional minor fluctuations, reaching $23,415 million by June 2023. This represents a near doubling of asset base over the analyzed periods, reflecting ongoing investments or asset accumulation that possibly supports expansion or strategic initiatives.
- Total Asset Turnover
- Total asset turnover showed a declining trend from 1.11 in September 2018 to 0.68 by June 2023. Initially, turnover ratios were above 1.0, indicating strong efficiency in generating sales from assets. However, the steady decline suggests decreasing efficiency over time, possibly due to the rising asset base outpacing the growth in sales, or operational challenges that reduced asset utilization efficiency. Notably, there were minor temporary improvements in asset turnover during mid-2021 to 2022, but the overall long-term trend remains downward.
- Summary
- The company experienced strong sales growth until the end of 2019, followed by a sharp pandemic-related decline, and a subsequent robust recovery peaking at the end of 2021. Despite the increasing net sales, asset growth outpaced sales growth, which adversely affected the total asset turnover ratio. This signals increasing capital investment or asset accumulation that has not translated into proportional sales increases, raising questions about asset utilization efficiency. Continuous monitoring of asset productivity and strategic focus on translating asset investments into sales growth will be important to maintaining operational efficiency going forward.
Equity Turnover
Estée Lauder Cos. Inc., equity turnover 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||||
| Stockholders’ equity, The Estée Lauder Companies Inc. | ||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||
| Equity turnover1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Equity Turnover, 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).
1 Q4 2023 Calculation
Equity turnover
= (Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023
+ Net salesQ1 2023)
÷ Stockholders’ equity, The Estée Lauder Companies Inc.
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales Trend
- Net sales exhibited a fluctuating pattern over the observed periods. Starting at $3,524 million in September 2018, sales increased to a peak of $4,624 million by December 2019. However, a sharp decline followed, reaching a low point of $2,430 million in June 2020, likely reflecting external challenges during that period. Subsequently, sales recovered rapidly, peaking again at $5,539 million by December 2021. The most recent quarters show a slight decline with fluctuations, ending at $3,609 million in June 2023.
- Stockholders’ Equity Development
- Stockholders’ equity remained relatively stable with moderate growth over the timeframe. Beginning at $4,406 million in September 2018, equity experienced slight decreases and increases but generally trended upward, achieving $6,218 million by December 2021. Afterwards, a gradual decline occurred with minor fluctuations, closing at $5,585 million in June 2023. This trend suggests consistent value retention and moderate capital accumulation, despite some recent decreases.
- Equity Turnover Ratio Analysis
- The equity turnover ratio, indicating sales generation relative to equity, showed variability consistent with changes in sales and equity. It started at 3.16 in September 2018 and rose to 3.63 by June 2020, reflecting efficient use of equity during the sales recovery after the dip. Subsequently, the ratio declined, reaching a low of 2.62 by December 2020 and hovered around 2.7 to 2.95 in the most recent periods. This decrease suggests a relative reduction in sales efficiency compared to earlier periods, potentially due to increased equity or less aggressive sales growth.
- Overall Insights
- The company experienced notable volatility in net sales, with significant drops likely linked to external economic conditions, followed by strong recovery phases. Stockholders' equity displayed gradual growth with some recent weakening, which may merit further examination. The declining trend in equity turnover ratio despite recovering sales suggests that equity has grown faster than sales in recent quarters, pointing to a potential shift in operational leverage or capital allocation strategy.