Ulta Beauty Inc (ULTA)

Cash conversion cycle

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Days of inventory on hand (DOH)	days	90.73	92.61	102.12	96.87	100.11
Days of sales outstanding (DSO)	days	6.77	7.13	9.88	11.46	6.87
Number of days of payables	days	29.09	33.13	38.34	41.43	32.04
Cash conversion cycle	days	68.41	66.60	73.67	66.89	74.94

February 3, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 90.73 + 6.77 – 29.09
= 68.41

The cash conversion cycle of Ulta Beauty Inc has shown fluctuations over the past five years. The company's ability to convert its inventory into cash improved from 2020 to 2021, as evidenced by a decrease in the cash conversion cycle from 74.94 days to 66.89 days. However, this improvement was not sustained, as the cycle increased to 73.67 days in 2022 before slightly decreasing to 66.60 days in 2023. The most recent data for 2024 shows a slight increase in the cash conversion cycle to 68.41 days.

Overall, the trend in Ulta Beauty Inc's cash conversion cycle indicates some variability in its efficiency in managing its cash flow from inventory. Further analysis would be needed to understand the factors influencing these fluctuations and to determine the impact on the company's overall financial performance and liquidity management.