Gross Profit rate is calculated by dividing gross profit by net sales. Estee Lauder’s gross profit ratio did not fluctuate much from one period to another, which indicates the company’s pricing of their products is stable. It has an adequate gross margin, meaning the company will be able to pay its operating and other expenses and can further develop the companies it recently acquired, which can bring even more profit for the company. GPR for Estee Lauder are 80.5% in 2015, 80.3% in 2014, and 80.1 …show more content…
Estee Lauder’s current ratios were 2.0923 in 2015, and 2.3460 in 2014. This signifies that for every dollar Estee Lauder has in current liabilities, it has $2.09 of current assets. This ratio measures the liquidity of the company, meaning the ability to pay back its obligations. So if a company 's current ratio is high that means there is a better it has to pay back its obligation, which looks favorable in the eyes of investors. However the potential weakness of this ratio is that it doesn 't take into account that the current assets could contain discrepancies that are not disclosed. This could lead the company to look more liquid than it actually