The Estee Lauder (MEX:EL) Beneish M-Score

: -2.81 (As of Today)

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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 -2.81 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:

MEX:EL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.2 Med: -2.59 Max: -2.01
Current: -2.81

During the past 13 years, the highest Beneish M-Score of The Estee Lauder was -2.01. The lowest was -3.20. And the median was -2.59.

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 Annual Data

Trend

Jun13

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Beneish M-Score

-2.92

-2.53

-3.01

-2.18

-2.60

The Estee Lauder Quarterly Data
	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23
Beneish M-Score																-2.01	-2.60	-2.54	-2.54	-2.81

Competitive Comparison

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.

Annual Data Quarterly Data

The Estee Lauder Beneish M-Score Distribution

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 in comparison to its industry or sector. The grey bar indicates the Beneish M-Score's extreme value range as defined by GuruFocus.

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:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9281

0.528 * 1.0606

0.404 * 0.8463

0.892 * 0.8407

0.115 * 1.0037

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.067

4.679 * -0.030622

0.327 * 1.0911

-2.90

This Year (Mar23) TTM:

Last Year (Mar22) TTM:

Total Receivables was MXN34,320 Mil.
Revenue was 67611.775 + 90071.52 + 79051.95 + 71640.198 = MXN308,375 Mil.
Gross Profit was 46720.8 + 66305.896 + 58474.305 + 50898.54 = MXN222,400 Mil.
Total Current Assets was MXN202,727 Mil.
Total Assets was MXN409,438 Mil.
Property, Plant and Equipment(Net PPE) was MXN87,764 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN14,157 Mil.
Selling, General, & Admin. Expense(SGA) was MXN184,483 Mil.
Total Current Liabilities was MXN138,793 Mil.
Long-Term Debt & Capital Lease Obligation was MXN123,688 Mil.
Net Income was 2811.9 + 7681.424 + 9836.235 + 1046.136 = MXN21,376 Mil.
Non Operating Income was -180.25 + -4152.648 + 20.115 + -2353.806 = MXN-6,667 Mil.
Cash Flow from Operations was 4794.65 + 27313.896 + -13074.75 + 21546.378 = MXN40,580 Mil.

Total Receivables was MXN43,983 Mil.
Revenue was 84522.195 + 113627.046 + 90308.304 + 78350.016 = MXN366,808 Mil.
Gross Profit was 64730.661 + 88538.424 + 68574.27 + 58722.7 = MXN280,566 Mil.
Total Current Assets was MXN189,155 Mil.
Total Assets was MXN425,279 Mil.
Property, Plant and Equipment(Net PPE) was MXN90,137 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN14,603 Mil.
Selling, General, & Admin. Expense(SGA) was MXN205,661 Mil.
Total Current Liabilities was MXN107,798 Mil.
Long-Term Debt & Capital Lease Obligation was MXN142,085 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)
	=	(34319.6 / 308375.443)	/	(43983.399 / 366807.561)
	=	0.111292	/	0.119909
	=	0.9281

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)
	=	(280566.055 / 366807.561)	/	(222399.541 / 308375.443)
	=	0.764886	/	0.721197
	=	1.0606

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 - (202727.175 + 87763.725) / 409437.875)	/	(1 - (189154.5 + 90137.097) / 425279.049)
	=	0.290513	/	0.343274
	=	0.8463

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
	=	308375.443	/	366807.561
	=	0.8407

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))
	=	(14603.138 / (14603.138 + 90137.097))	/	(14157.329 / (14157.329 + 87763.725))
	=	0.139422	/	0.138905
	=	1.0037

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)
	=	(184482.977 / 308375.443)	/	(205660.503 / 366807.561)
	=	0.598241	/	0.560677
	=	1.067

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)
	=	((123687.55 + 138792.5) / 409437.875)	/	((142084.896 + 107798.154) / 425279.049)
	=	0.641074	/	0.587574
	=	1.0911

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
	=	(21375.695 - -6666.589	-	40580.174)	/	409437.875
	=	-0.030622

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 -2.90 suggests that the company is unlikely to be a manipulator.

The Estee Lauder Beneish M-Score Related Terms

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The Estee Lauder (MEX:EL) Business Description

Industry

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

Comparable Companies

Traded in Other Exchanges

EL:USA ELAA:Germany ELCI34:Brazil ESLA:Austria

Address

767 Fifth Avenue, New York, NY, USA, 10153

Website

https://www.elcompanies.com

Estee Lauder is the world leader in the global prestige beauty market, participating across skincare (56% of fiscal 2022 sales), makeup (26%), fragrance (14%), and haircare (4%) categories, with popular brands such as Estee Lauder, Clinique, MAC, La Mer, Jo Malone, Aveda, Bobbi Brown, Too Faced, Origins, Dr. Jart+, and The Ordinary. The firm operates in 150 countries, with 26% of fiscal 2022 revenue stemming from the Americas, 43% from Europe, the Middle East and Africa, and 31% from Asia-Pacific. The company sells its products through department stores, travel retail, multibrand specialty beauty stores, brand-dedicated freestanding stores, e-commerce, salons/spas, and perfumeries.