Financial Analysis of Estee Lauder Company

Paper Summary:

Financial ratios are important in determining the relationships between different values in the most important financial accounts used by a company. In many ways, they constitute the easiest way to evaluate a company from a financial and profitability point of view. Each financial ratio targets a particular area of expertise. This report deals with liquidity ratios, profitability ratios, asset efficiency ratios, solvency ratios and market tests in order to build an image of where the Estee Lauder Company is currently standing.

From the Paper:

"In the case of Estee Lauder, current ratio followed an ascending trend during the period from 2000 to 2002, only to fall back in 2004 to similar values as in 2000. The current ratio is thus oscillating around value segments of 1.7-2.0, with a mean of 1.8. These values show a consolidated short-term financial solvability for the company. During a five year period, oscillations have been minor in a value set around 1.8, pointing out towards the fact that Estee Lauder is not likely to have difficulties in honouring short-term debts."

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