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GuruFocus has detected 2 Warning Signs with The Estee Lauder Companies Inc \$EL.
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The Estee Lauder Companies Inc (NYSE:EL)
Debt-to-Equity
1.06 (As of Dec. 2016)

The Estee Lauder Companies Inc's current portion of long-term debt for the quarter that ended in Dec. 2016 was \$2,143 Mil. The Estee Lauder Companies Inc's long-term debt for the quarter that ended in Dec. 2016 was \$1,890 Mil. The Estee Lauder Companies Inc's total equity for the quarter that ended in Dec. 2016 was \$3,793 Mil. The Estee Lauder Companies Inc's debt to equity for the quarter that ended in Dec. 2016 was 1.06.

A high debt to equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense.

Definition

Debt to Equity measures the financial leverage a company has.

The Estee Lauder Companies Inc's Debt to Equity Ratio for the fiscal year that ended in Jun. 2016 is calculated as

 Debt to Equity = Total Debt / Total Equity = (Current Portion of Long-Term Debt + Long-Term Debt) / Total Equity = (331.5 + 1910) / 3571.9 = 0.63

The Estee Lauder Companies Inc's Debt to Equity Ratio for the quarter that ended in Dec. 2016 is calculated as

 Debt to Equity = Total Debt / Total Equity = (Current Portion of Long-Term Debt + Long-Term Debt) / Total Equity = (2143 + 1890) / 3793 = 1.06

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

In the calculation of Debt to Equity, we use the total of Current Portion of Long-Term Debt and Long-Term Debt divided by Total Equity. In some calculations, Total Liabilities is used to for calculation.

Be Aware

Because a company can increase its Return on Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return on Equity companies.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

The Estee Lauder Companies Inc Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 deb2equity 0.91 0.72 0.87 0.63 0.46 0.47 0.41 0.35 0.45 0.63

The Estee Lauder Companies Inc Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 deb2equity 0.35 0.36 0.38 0.45 0.59 0.55 0.51 0.63 0.68 1.06
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