Ulta Beauty Inc (ULTA)
Liquidity ratios
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Current ratio | 1.70 | 1.71 | 1.71 | 1.61 | 1.61 |
| Quick ratio | 0.40 | 0.59 | 0.46 | 0.44 | 0.56 |
| Cash ratio | 0.40 | 0.46 | 0.46 | 0.44 | 0.44 |
Ulta Beauty Inc's liquidity ratios indicate the company's ability to meet its short-term obligations.
- Current Ratio: Ulta Beauty Inc's current ratio has remained relatively stable over the years, ranging from 1.61 to 1.71. This suggests that the company has sufficient current assets to cover its current liabilities. A current ratio above 1 indicates that the company can pay off its short-term liabilities with its current assets.
- Quick Ratio: Ulta Beauty Inc's quick ratio, also known as the acid-test ratio, has fluctuated between 0.40 and 0.59. This ratio provides a more stringent measure of liquidity as it excludes inventory from current assets. A quick ratio below 1 may indicate potential issues in meeting short-term obligations without relying on selling inventory.
- Cash Ratio: Ulta Beauty Inc's cash ratio has also shown consistency, ranging from 0.40 to 0.46. This ratio indicates the company's ability to cover its current liabilities with its cash and cash equivalents alone. A higher cash ratio is generally preferred as it signifies a stronger ability to meet short-term obligations using readily available cash.
Overall, while Ulta Beauty Inc's current ratio suggests good liquidity, the quick ratio and cash ratio highlight potential concerns regarding the company's ability to meet its short-term obligations without relying on inventory or non-cash assets. It is important for the company to monitor and manage its liquidity position effectively to ensure ongoing financial stability.
See also:
Additional liquidity measure
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 103.99 | 68.41 | 93.15 | 94.95 | 66.60 |
The cash conversion cycle is a vital metric that signifies how quickly a company can convert its resources invested in inventory and accounts receivable into cash flows from sales. Analyzing Ulta Beauty Inc's cash conversion cycle over the past few years reveals fluctuations in their efficiency in managing working capital.
On January 28, 2023, Ulta Beauty Inc had a relatively efficient cash conversion cycle of 66.60 days, indicating the company was able to swiftly convert its inventory and receivables into cash. However, by January 31, 2023, the cycle extended to 94.95 days, suggesting a potential slowdown in operational efficiency.
Over the following years, Ulta Beauty Inc continued to experience fluctuations in its cash conversion cycle. By January 31, 2024, the cycle decreased slightly to 93.15 days, showing some improvement. The cycle then improved significantly by February 3, 2024, reaching 68.41 days, which indicates that the company may have enhanced its working capital management practices.
However, on January 31, 2025, Ulta Beauty Inc experienced a significant increase in its cash conversion cycle to 103.99 days, suggesting potential challenges in efficiently converting inventory and receivables to cash during that period.
Overall, Ulta Beauty Inc's cash conversion cycle demonstrates variations in its working capital efficiency over the years, highlighting the importance of continuous monitoring and optimization of operational processes to enhance financial performance and liquidity.