Ulta Beauty Inc (ULTA)

Days of sales outstanding (DSO)

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Receivables turnover		53.90	51.19	36.93	31.86	53.09
DSO	days	6.77	7.13	9.88	11.46	6.87

February 3, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 53.90
= 6.77

Ulta Beauty Inc's Days of Sales Outstanding (DSO) is a financial metric that measures the average number of days it takes the company to collect revenue after making a sale. A lower DSO indicates faster collection of accounts receivable, which is generally preferred as it signifies better efficiency in managing credit sales.

From the data provided, Ulta Beauty Inc's DSO has shown a decreasing trend over the past five years, which is a positive sign. In the most recent fiscal year ending on February 3, 2024, the company's DSO was 6.77 days, indicating a more efficient collection process compared to previous years.

The decreasing trend in DSO suggests that Ulta Beauty Inc has been able to effectively manage its accounts receivable and collect payments from customers more promptly, which can improve its cash flow and overall liquidity position. It may also indicate strong customer relationships, effective credit policies, and efficient collection processes in place.

Overall, the declining trend in Ulta Beauty Inc's DSO reflects a positive aspect of its financial management and efficiency in collecting revenue from sales, which can be a good indicator of the company's operational effectiveness and financial health.