GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » The Estee Lauder Companies Inc (MEX:EL) » Definitions » Altman Z2-Score

The Estee Lauder (MEX:EL) Altman Z2-Score : 3.70 (As of Jul. 22, 2024)


View and export this data going back to 2014. Start your Free Trial

What is The Estee Lauder Altman Z2-Score?

Altman Z2-Score, also known as Z"-Score, is used to predict the likelihood that a non-manufacturing company (excluding property/financial company) will face bankruptcy within a two-year period.

Good Sign:

The Estee Lauder has a Altman Z2-Score of 3.70, indicating it is in Safe Zones. This implies the Altman Z2-Score is strong.

The zones of discrimination were as such:

When Altman Z2-Score <= 1.1, it is in Distress Zones.
When Altman Z2-Score >= 2.6, it is in Safe Zones.
When Altman Z2-Score is between 1.1 and 2.6, it is in Grey Zones.

The historical rank and industry rank for The Estee Lauder's Altman Z2-Score or its related term are showing as below:

MEX:EL' s Altman Z2-Score Range Over the Past 10 Years
Min: 3.29   Med: 5.16   Max: 7.66
Current: 3.69

During the past 13 years, The Estee Lauder's highest Altman Z2-Score was 7.66. The lowest was 3.29. And the median was 5.16.


The Estee Lauder Altman Z2-Score Historical Data

The historical data trend for The Estee Lauder's Altman Z2-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 Altman Z2-Score Chart

The Estee Lauder Annual Data
Trend Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
Altman Z2-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 5.55 3.98 4.65 4.70 3.58

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
Altman Z2-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 3.96 3.58 3.43 3.29 3.69

Competitive Comparison of The Estee Lauder's Altman Z2-Score

For the Household & Personal Products subindustry, The Estee Lauder's Altman Z2-Score, along with its competitors' market caps and Altman Z2-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 Altman Z2-Score Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, The Estee Lauder's Altman Z2-Score distribution charts can be found below:

* The bar in red indicates where The Estee Lauder's Altman Z2-Score falls into.



The Estee Lauder Altman Z2-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Z2-Score, also known as Z"-Score is the Z-Score for non-manufacturing companies excluding property/financial companies.

The Estee Lauder's Altman Z2-Score for today is calculated with this formula:

Z=6.56*X1+3.26*X2+6.72*X3+1.05*X4_2
=6.56*0.1374+3.26*0.6145+6.72*0.0622+1.05*0.3564
=3.70

* 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. GuruFocus does not calculate Altman Z2-Score when X4_2 value is 0.

Trailing Twelve Months (TTM) ended in Mar. 2024:
Total Assets was MXN376,735 Mil.
Total Current Assets was MXN141,632 Mil.
Total Current Liabilities was MXN89,885 Mil.
Retained Earnings was MXN231,518 Mil.
Pre-Tax Income was 8065.78 + 8809.635 + 801.269 + -822.907 = MXN16,854 Mil.
Interest Expense was -1560.048 + -1663.476 + -1654.795 + -1697.246 = MXN-6,576 Mil.
Total Liabilities was MXN267,465 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(141632.44 - 89885.317)/376734.989
=0.1374

X2=Retained Earnings/Total Assets
=231517.757/376734.989
=0.6145

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(16853.777 - -6575.565)/376734.989
=0.0622

X4_2=Net Worth/Total Liabilities
=(Total Stockholders Equity - Preferred Stock)/Total Liabilities
=(95328.889 - 0)/267465.246
=0.3564

The zones of discrimination were as such:

Distress Zones - 1.1 < Grey Zones < 2.6 - Safe Zones

The Estee Lauder has a Altman Z2-Score of 3.70 indicating it is in Safe Zones.


The Estee Lauder  (MEX:EL) Altman Z2-Score Explanation

The original Z-Score model was based on publicly traded manufacturing companies while the Z2-Score, also known as Z"-score can be used for any type of company excluding property/financial companies. Both Z-Score and Z2-Score describes the financial health of a company, and its likelihood of financial distress.

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4_2, Net Worth (Total Stockholders Equity - Preferred Stock)/Total Liabilities (NW/TL): it compares a company’s stock net worth with its total liabilities and can be used to assess the extent of its reliance on debt.

Read more about Altman Z2-Score, the original research on Z-Score and the additional research on Z2-Score.


Be Aware

Altman Z2-Score does not apply to financial companies.


The Estee Lauder Altman Z2-Score Related Terms

Thank you for viewing the detailed overview of The Estee Lauder's Altman Z2-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


The Estee Lauder (MEX:EL) 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.