e.l.f. Beauty, Inc. (NYSE:ELF)

Debt to Equity and Related Ratios

The Debt to Equity ratio demonstrates a general decreasing trend from 0.57 in 2020 to a low of 0.16 in 2023, followed by an increase to 0.41 in 2024. When including operating lease liabilities, a similar pattern emerges with values declining from 0.63 to 0.20 at the lowest point in 2023, then rising to 0.45 in 2024. This indicates a period of reduced reliance on debt relative to equity up to 2023, with a moderate uptick in leverage in the final year.

Debt to Capital and Related Ratios

Debt to Capital ratios follow a comparable pattern, decreasing from 0.36 in 2020 to 0.14 in 2023 and then increasing to 0.29 in 2024. Including operating lease liabilities, the ratio moves from 0.39 to 0.17 before rising again to 0.31. This trend reflects a significant reduction in the company's debt load relative to its capital base until 2023, followed by a partial reversal in the subsequent year.

Debt to Assets and Related Ratios

The Debt to Assets ratio drops steadily from 0.31 in 2020 to 0.11 in 2023, with a later increase to 0.23 in 2024. Including operating lease liabilities, the ratio shifts from 0.34 to 0.14 and then up to 0.26. The trends suggest improving asset financing structure with lower debt dependence until 2023, then a rebound in debt utilization against assets.

Financial Leverage

The Financial Leverage ratio decreases gradually from 1.87 in 2020 to 1.45 in 2023, indicating a decline in the degree of leverage. However, it rises again to 1.76 in 2024, reflecting a tendency toward higher leverage after several years of reduction.

Interest Coverage

Interest Coverage shows higher variability with a decline from 4.36 in 2020 to 1.90 in 2021, followed by a marked increase to 11.41 in 2022, peaking at 17.06 in 2023, and then a decrease to 12.91 in 2024. These fluctuations signify periods of varying ability to meet interest obligations, with notably improved coverage after 2021 and a slight reduction in the latest year.

Fixed Charge Coverage

Fixed Charge Coverage mirrors the interest coverage trend, declining from 3.38 in 2020 to 1.42 in 2021, then increasing substantially to 4.57 in 2022 and further to 8.43 in 2023, before marginally decreasing to 8.35 in 2024. This pattern suggests enhanced capacity to cover fixed charges after 2021, with sustained strength through the last two years.

Total Debt

The total debt demonstrated a declining trend from March 31, 2020, to March 31, 2023, decreasing from $138.7 million to $66.5 million. However, there was a significant increase in the subsequent year, reaching $262.1 million as of March 31, 2024.

Stockholders’ Equity

Stockholders’ equity consistently increased over the five-year period. Starting at $242.2 million in 2020, it rose each year to reach $642.6 million by March 31, 2024. This indicates ongoing equity growth and potentially retained earnings or capital injections.

Debt to Equity Ratio

The debt to equity ratio steadily decreased from 0.57 in 2020 to 0.16 in 2023, reflecting a declining reliance on debt relative to equity. However, this ratio increased again to 0.41 by 2024, corresponding with the sharp rise in total debt during the last year.

The financial data exhibits several noteworthy trends across the five-year period ending March 31, 2024.

Total Debt (including operating lease liability)

The total debt demonstrates a declining trend from 2020 to 2023, decreasing from approximately $153 million in 2020 to about $82 million in 2023. However, in the most recent year, there is a significant reversal with total debt sharply increasing to approximately $291 million by March 31, 2024, which represents an increase of more than threefold from the previous year.

Stockholders’ Equity

Stockholders' equity consistently grows over the observed period, rising from approximately $242 million in 2020 to $643 million in 2024. This steady increase indicates a strengthening equity base, with the most substantial absolute growth occurring between 2023 and 2024.

Debt to Equity Ratio (including operating lease liability)

The debt-to-equity ratio follows a generally declining path from 0.63 in 2020 to 0.20 in 2023, reflecting a decreasing reliance on debt relative to equity and suggesting an improvement in financial leverage and solvency. However, the ratio increases to 0.45 in 2024, corresponding with the sharp rise in total debt, although it remains below the initial 2020 level.

Overall, the company appears to have reduced its indebtedness relative to its equity for several years, enhancing financial stability. The substantial increase in total debt and the resulting rise in leverage in the latest year may warrant further analysis to understand the underlying causes and implications for future financial risk and capital structure strategy.

The financial data indicates several notable trends concerning the company's capital structure over the five-year period ending March 31, 2024.

Total debt

The total debt shows a general declining trend from 2020 to 2023, decreasing from approximately $138.7 million to $66.5 million. However, there is a significant increase in the last period, rising sharply to about $262.1 million in 2024. This suggests a major change in the company’s borrowing behavior or financing strategy in the most recent year.

Total capital

Total capital exhibits a consistent growth trend throughout the period. It increases steadily from $380.8 million in 2020 to $477.5 million in 2023, and then nearly doubles to $904.7 million by 2024. This sharp increase alongside the spike in total debt indicates an expansion of the company’s capital base, likely supported by increased liabilities and/or equity financing.

Debt to capital ratio

The debt to capital ratio declines steadily from 0.36 in 2020 to a low of 0.14 in 2023, reflecting a reduction in leverage relative to the overall capital structure. However, this trend reverses in 2024, with the ratio rising to 0.29. This increase corresponds with the surge in total debt and suggests a partial shift back towards a higher reliance on debt financing.

Overall, the data indicate a period of deleveraging from 2020 to 2023, characterized by reduced debt levels and gradually increasing capital. The sharp increases in both total debt and total capital in 2024 may point to strategic financing initiatives or capital investments, resulting in higher leverage than the low point seen in the previous year.

Total Debt (Including Operating Lease Liability)

The total debt level demonstrated a declining trend from March 31, 2020, through March 31, 2023, decreasing from $152.978 million to $82.167 million. However, there was a significant and sharp increase in total debt in the year ending March 31, 2024, where it surged to $290.601 million, more than tripling compared to the previous year.

Total Capital (Including Operating Lease Liability)

Total capital exhibited a consistent upward trend over the five-year period. Starting at $395.149 million in 2020, the figure increased steadily each year, reaching $933.173 million by March 31, 2024. The increase was notably more pronounced in the final year, aligning with the sharp rise in total debt.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio showed a steady decline from 0.39 in 2020 to 0.17 in 2023, indicating an improving capital structure with reduced reliance on debt relative to overall capital. This trend reversed in the final year, with the ratio increasing to 0.31 in 2024, reflecting the sharp rise in total debt relative to capital, though still below the initial level reported in 2020.

Summary of Trends and Insights

Over the analyzed period, the company successfully reduced its debt burden while simultaneously increasing its total capital base through 2023, resulting in a stronger balance sheet and less leverage. The pronounced increase in both total debt and capital in 2024 suggests a strategic decision to leverage more debt, possibly to finance expansion or capital-intensive initiatives. Despite this increase, the debt to capital ratio remains moderate compared with the starting point, although the upward shift indicates a higher leverage position relative to the previous three years. Continuous monitoring of this trend is advisable to assess the impact on financial risk and cost of capital in the forthcoming periods.

Total Debt

The total debt exhibited a declining trend from March 31, 2020, to March 31, 2023, decreasing from 138,656 thousand US dollars to 66,456 thousand US dollars. However, there was a significant increase in total debt in the last reported period, rising sharply to 262,126 thousand US dollars by March 31, 2024.

Total Assets

Total assets showed consistent growth throughout the five-year period. Beginning at 453,104 thousand US dollars in 2020, assets increased steadily each year, reaching 1,129,247 thousand US dollars by March 31, 2024. This indicates an expanding asset base over the period under review.

Debt to Assets Ratio

The debt to assets ratio declined from 0.31 in 2020 to a low of 0.11 in 2023, reflecting a reduction in leverage relative to the asset base. Nevertheless, this ratio increased again to 0.23 in 2024, corresponding with the substantial rise in total debt in the same period. While still below the initial ratio, this indicates a moderate increase in leverage.

Summary

Overall, the data reflects a company that initially reduced its total debt while steadily growing its asset base, resulting in a declining debt to assets ratio. The trend reversed in the most recent year, with a large increase in total debt causing the leverage ratio to rise, although it remains below the highest level observed in 2020. The substantial growth in assets suggests continuing expansion, but the recent increase in debt warrants monitoring for potential implications on financial risk.

Total Debt (Including Operating Lease Liability)

The total debt level showed a decreasing trend from March 31, 2020, to March 31, 2023, declining from $152.978 million to $82.167 million. However, there was a sharp increase in total debt in the latest period ending March 31, 2024, rising to $290.601 million, which is significantly higher than all previous years.

Total Assets

Total assets consistently increased every year over the period analyzed, commencing at $453.104 million as of March 31, 2020, and reaching $1.129 billion by March 31, 2024. The asset base more than doubled over the five-year span, with a particularly notable increase from 2023 to 2024.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio declined steadily from 0.34 in 2020 to 0.14 in 2023, indicating a reduction in leverage relative to asset size through this interval. However, in 2024, the ratio increased to 0.26, reflecting the recent rise in total debt against the burgeoning asset base, suggesting a moderate increase in leverage compared to the prior year but still lower than the earliest years analyzed.

The financial data reveals several notable trends over the five-year period ending on March 31, 2024.

Total assets

Total assets have shown a consistent increase year-over-year, rising from approximately $453.1 million in 2020 to $1.129 billion in 2024. This represents a significant expansion in the company’s asset base, more than doubling over the period. The most prominent growth occurred between 2023 and 2024, indicating accelerated asset acquisition or valuation growth.

Stockholders’ equity

Stockholders’ equity has also experienced steady growth throughout the five years, increasing from $242.2 million in 2020 to $642.6 million in 2024. The equity growth rate appears to have intensified in recent years, particularly from 2022 onwards, reflecting possibly higher retained earnings, capital injections, or valuation gains contributing to the company’s net worth.

Financial leverage

The financial leverage ratio, defined as the ratio of total assets to stockholders’ equity, shows a downward trend from 1.87 in 2020 to a low of 1.45 in 2023, followed by an increase to 1.76 in 2024. The initial decline suggests a gradual reduction in reliance on debt or liabilities relative to equity, enhancing financial stability. However, the increase in 2024 indicates an uptick in leverage, implying a moderate increase in external financing or liabilities relative to equity during the most recent year.

Overall, the data depicts robust growth in both assets and equity, indicating expanding operational capacity and strengthened capital base. However, the recent rise in financial leverage highlights a shift towards relatively higher financial risk, which may warrant further monitoring.

Earnings before interest and tax (EBIT)

The EBIT demonstrates a volatile yet overall increasing trend over the examined period. The value decreased sharply from 31,239 thousand USD in 2020 to 7,785 thousand USD in 2021, indicating a significant drop in operating profitability. However, from 2021 onwards, EBIT recovered markedly, rising to 27,875 thousand USD in 2022 and then surging to 68,064 thousand USD in 2023. The upward trend continued robustly into 2024, with EBIT reaching 152,830 thousand USD, representing more than a fivefold increase compared to 2023 and a substantial improvement from previous years.

Interest expense

Interest expense displayed a decreasing trend from 7,170 thousand USD in 2020 to a low of 2,444 thousand USD in 2022. However, from 2022, the interest expense began to rise again, increasing to 3,990 thousand USD in 2023 and further more than doubling to 11,840 thousand USD in 2024. This increase in interest expense in the last two years suggests either a higher level of debt or increased interest rates affecting financing costs.

Interest coverage ratio

The interest coverage ratio, a measure of the ability to meet interest obligations, reflects considerable fluctuation. It fell significantly from 4.36 in 2020 to a low of 1.90 in 2021, indicating reduced capacity to cover interest expenses during that year. Subsequently, it improved dramatically, climbing to 11.41 in 2022 and reaching a peak of 17.06 in 2023, reflecting enhanced profitability and better coverage of interest costs. In 2024, the ratio declined somewhat to 12.91, which while lower than the prior year, still suggests a strong ability to cover interest expenses despite the increased interest expense observed.

Overall analysis

The data indicates that the company experienced a significant profitability setback in 2021, as evidenced by both a sharp decline in EBIT and a drop in interest coverage ratio. However, from 2022 onwards, there was a strong recovery and growth in operating earnings, culminating in exceptionally high EBIT in 2024. Concurrently, interest expenses, after an initial decline, increased substantially in the last two years, which could reflect higher borrowing or cost of debt. Despite this, the interest coverage ratio remains robust, signifying improved earnings performance relative to interest obligations. These patterns suggest effective management of operating performance and financing costs, with a capacity to generate sufficient earnings to cover interest even amidst rising interest expenses in recent periods.

Earnings before fixed charges and tax

The earnings before fixed charges and tax showed significant volatility over the period. Starting at US$ 34,189 thousand in March 2020, there was a notable decline to US$ 12,541 thousand in March 2021. This was followed by a recovery to US$ 32,561 thousand in March 2022. Subsequently, earnings experienced substantial growth, almost doubling to US$ 72,702 thousand in March 2023 and then more than doubling again to reach US$ 160,171 thousand by March 2024.

Fixed charges

Fixed charges decreased steadily from US$ 10,120 thousand in March 2020 to US$ 7,130 thousand in March 2022. However, from that point onward, there was a moderate increase to US$ 8,628 thousand in March 2023, followed by a sharp rise to US$ 19,181 thousand in March 2024. This indicates a stronger financial obligation related to fixed costs in the most recent period.

Fixed charge coverage ratio

The fixed charge coverage ratio mirrored the trends in earnings relative to fixed charges. The ratio began at 3.38 in March 2020, fell sharply to 1.42 in March 2021, suggesting a weaker ability to cover fixed charges at that time. It then improved significantly to 4.57 in March 2022 and increased further to 8.43 in March 2023, maintaining a similar level at 8.35 in March 2024. These values indicate a substantial strengthening of the company's capacity to meet its fixed charges over time, peaking in the last two years analyzed.