GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » The Estee Lauder Companies Inc (NYSE:EL) » Definitions » Beneish M-Score

The Estee Lauder (The Estee Lauder) Beneish M-Score : -2.65 (As of Jul. 17, 2024)


View and export this data going back to 1995. Start your Free Trial

What is The Estee Lauder Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.65 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for The Estee Lauder's Beneish M-Score or its related term are showing as below:

EL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.01   Med: -2.64   Max: -2.01
Current: -2.65

During the past 13 years, the highest Beneish M-Score of The Estee Lauder was -2.01. The lowest was -3.01. And the median was -2.64.


The Estee Lauder Beneish M-Score Historical Data

The historical data trend for The Estee Lauder's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

The Estee Lauder Beneish M-Score Chart

The Estee Lauder Annual Data
Trend Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.53 -3.01 -2.18 -2.60 -2.59

The Estee Lauder Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Beneish M-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.81 -2.59 -2.74 -2.75 -2.65

Competitive Comparison of The Estee Lauder's Beneish M-Score

For the Household & Personal Products subindustry, The Estee Lauder's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


The Estee Lauder's Beneish M-Score Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, The Estee Lauder's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where The Estee Lauder's Beneish M-Score falls into.



The Estee Lauder Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of The Estee Lauder for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0065+0.528 * 1.019+0.404 * 1.3946+0.892 * 0.9675+0.115 * 0.9291
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0454+4.679 * -0.066035-0.327 * 0.9887
=-2.65

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Mar24) TTM:Last Year (Mar23) TTM:
Total Receivables was $1,854 Mil.
Revenue was 3940 + 4279 + 3518 + 3609 = $15,346 Mil.
Gross Profit was 2833 + 3125 + 2448 + 2446 = $10,852 Mil.
Total Current Assets was $8,534 Mil.
Total Assets was $22,700 Mil.
Property, Plant and Equipment(Net PPE) was $4,969 Mil.
Depreciation, Depletion and Amortization(DDA) was $810 Mil.
Selling, General, & Admin. Expense(SGA) was $9,597 Mil.
Total Current Liabilities was $5,416 Mil.
Long-Term Debt & Capital Lease Obligation was $8,972 Mil.
Net Income was 330 + 313 + 31 + -33 = $641 Mil.
Non Operating Income was -14 + -4 + 1 + -28 = $-45 Mil.
Cash Flow from Operations was 534 + 1345 + -408 + 714 = $2,185 Mil.
Total Receivables was $1,904 Mil.
Revenue was 3751 + 4620 + 3930 + 3561 = $15,862 Mil.
Gross Profit was 2592 + 3401 + 2907 + 2530 = $11,430 Mil.
Total Current Assets was $11,247 Mil.
Total Assets was $22,715 Mil.
Property, Plant and Equipment(Net PPE) was $4,869 Mil.
Depreciation, Depletion and Amortization(DDA) was $729 Mil.
Selling, General, & Admin. Expense(SGA) was $9,489 Mil.
Total Current Liabilities was $7,700 Mil.
Long-Term Debt & Capital Lease Obligation was $6,862 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1854 / 15346) / (1904 / 15862)
=0.120813 / 0.120035
=1.0065

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(11430 / 15862) / (10852 / 15346)
=0.72059 / 0.707155
=1.019

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8534 + 4969) / 22700) / (1 - (11247 + 4869) / 22715)
=0.405154 / 0.290513
=1.3946

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=15346 / 15862
=0.9675

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(729 / (729 + 4869)) / (810 / (810 + 4969))
=0.130225 / 0.140163
=0.9291

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(9597 / 15346) / (9489 / 15862)
=0.625375 / 0.598222
=1.0454

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((8972 + 5416) / 22700) / ((6862 + 7700) / 22715)
=0.633833 / 0.641074
=0.9887

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(641 - -45 - 2185) / 22700
=-0.066035

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

The Estee Lauder has a M-score of -2.65 suggests that the company is unlikely to be a manipulator.


The Estee Lauder Beneish M-Score Related Terms

Thank you for viewing the detailed overview of The Estee Lauder's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


The Estee Lauder (The Estee Lauder) Business Description

Address
767 Fifth Avenue, New York, NY, USA, 10153
Estee Lauder is a leader in the global prestige beauty market, participating across skin care (56% of 2022 sales), makeup (26%), fragrance (14%), and hair care (4%) categories, with top-selling brands such as Estee Lauder, Clinique, M.A.C, La Mer, Jo Malone London, Aveda, Bobbi Brown, and Origins. The firm operates in more than 150 countries, generating 26% of revenue from the Americas, 43% from Europe, the Middle East and Africa (including travel retail), and 31% from Asia Pacific. Estee Lauder sells its products through department stores, travel retail, specialty multibrand beauty stores, brand-dedicated freestanding stores, e-commerce, salons/spas, and perfumeries.
Executives
Charlene Barshefsky director
Jane Lauder director 767 FIFTH AVENUE, NEW YORK NY 10153
Hudis Jane Hertzmark officer: Group President C/O THE ESTEE LAUDER COMPANIES INC., 767 FIFTH AVENUE, NEW YORK NY 10153
Carl P. Haney officer: EVP-Global R&D C/O ESTEE LAUDER COMPANIES INC., 767 FIFTH AVENUE, NEW YORK NY 10153
Jennifer Hyman director 767 FIFTH AVENUE, C/O THE ESTEE LAUDER COMPANIES INC., NEW YORK NY 10153
Fabrizio Freda officer: President and COO 767 FIFTH AVENUE, NEW YORK NY 10153
De La Faverie Stephane officer: Executive Group President C/O THE ESTEE LAUDER COMPANIES INC., NEW YORK NY 10153
Michael O'hare officer: EVP-Global Human Resources 767 FIFTH AVENUE, NEW YORK NY 10153
Wei Sun Christianson director MORGAN STANLEY, TOWER 1, 18 TAIPINGQIAO ST. XICHENG DIST, BEIJING F4 1000032
Barry S Sternlicht director STARWOOD CAPITAL GROUP GLOBAL LP, 1601 WASHINGTON AVENUE, SUITE 800, MIAMI BEACH FL 33139
Angela Wei Dong director C/O THE ESTEE LAUDER COMPANIES INC., 767 FIFTH AVENUE, NEW YORK NY 10153
Peter Jueptner officer: President, International
Arturo Nunez director C/O THE ESTEE LAUDER COMPANIES INC., 767 FIFTH AVENUE, NEW YORK NY 10153
Ronald S Lauder director, 10 percent owner, officer: Chairman Clinique Labs, Inc. 767 FIFTH AVENUE, NEW YORK NY 10153
John Demsey officer: Group President 767 FIFTH AVENUE, NEW YORK NY 10036