Ulta Beauty Inc (ULTA)

Short-term

Turnover ratios

Ulta Beauty Inc's activity ratios provide insight into how efficiently the company is managing its assets and operations.

1. Inventory Turnover: Ulta's inventory turnover has ranged between 3.57 and 4.02 over the past five years. This indicates that, on average, Ulta is selling and restocking its inventory approximately 3.65 to 4.02 times per year. A higher turnover ratio suggests effective inventory management.

2. Receivables Turnover: Ulta's receivables turnover has shown an increasing trend from 31.86 to 53.90 over the same period. This indicates that Ulta is collecting its accounts receivable more frequently, reflecting effective credit management and sales strategies.

3. Payables Turnover: Ulta's payables turnover has ranged between 8.81 and 12.55 over the past five years. A higher turnover ratio suggests that Ulta is paying its suppliers more frequently, which could imply strong supplier relationships or effective cash management.

4. Working Capital Turnover: Ulta's working capital turnover has fluctuated between 5.25 and 11.93 over the period under consideration. A higher working capital turnover ratio indicates that Ulta is efficiently utilizing its working capital to generate sales revenue.

Overall, Ulta Beauty Inc's activity ratios suggest that the company is effectively managing its inventory, receivables, payables, and working capital to drive operational efficiency and profitability.

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Average number of days

Days of inventory on hand (DOH) measures how many days it takes for a company to sell its inventory. A lower DOH indicates efficient inventory management. Ulta Beauty Inc's DOH has improved over the years from 100.11 days in 2020 to 90.73 days in 2024, suggesting better inventory turnover.

Days of sales outstanding (DSO) reflects the average number of days it takes a company to collect revenue after a sale is made. A lower DSO indicates efficient collection of receivables. Ulta Beauty Inc's DSO has fluctuated over the years but improved from 11.46 days in 2021 to 6.77 days in 2024, showing a positive trend in collecting sales revenue efficiently.

Number of days of payables reveals how long a company takes to pay its suppliers. A higher number indicates a longer time to settle payables. Ulta Beauty Inc's days of payables have shown some fluctuation but have decreased from 41.43 days in 2021 to 29.09 days in 2024, indicating the company is managing its payables more effectively.

Overall, Ulta Beauty Inc has displayed improvements in its activity ratios over the years, indicating enhanced efficiency in managing inventory, collecting sales revenue, and paying suppliers.

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See also:

Ulta Beauty Inc Short-term (Operating) Activity Ratios

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Long-term

Ulta Beauty Inc's long-term activity ratios indicate its efficiency in utilizing fixed assets and total assets to generate revenue over the years. The fixed asset turnover ratio has shown a consistent trend of improvement, with values ranging from 6.14 to 10.11 over the past five years. This suggests that Ulta Beauty has been able to generate more sales revenue relative to its investment in fixed assets, indicating effective asset utilization and operational efficiency.

Similarly, the total asset turnover ratio has also shown a positive trend, increasing from 1.21 to 1.96 over the same period. This indicates that Ulta Beauty has been able to generate more revenue per dollar of total assets employed, reflecting its ability to efficiently manage its assets and generate sales.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that Ulta Beauty has been improving its asset utilization efficiency over the years, which is a positive indicator of the company's operational performance and financial health.

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See also:

Ulta Beauty Inc Long-term (Investment) Activity Ratios