Ulta Beauty Inc (ULTA)
Cash conversion cycle
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 90.73 | 127.86 | 101.86 | 100.84 | 92.61 | 131.90 | 107.03 | 104.56 | 102.12 | 140.23 | 110.05 | 109.35 | 96.87 | 122.90 | 115.45 | 109.02 | 100.11 | 128.25 | 106.02 | 103.17 |
| Days of sales outstanding (DSO) | days | 6.77 | 6.81 | 5.93 | 6.62 | 7.13 | 7.53 | 7.03 | 7.78 | 9.88 | 7.62 | 7.36 | 8.14 | 11.46 | 7.95 | 7.31 | 4.74 | 6.87 | 5.71 | 5.52 | 5.81 |
| Number of days of payables | days | 29.09 | 32.90 | 29.25 | 35.78 | 33.13 | 40.36 | 37.70 | 38.98 | 38.34 | 54.70 | 40.80 | 44.66 | 41.43 | 40.86 | 33.58 | 37.90 | 32.04 | 47.19 | 36.26 | 33.62 |
| Cash conversion cycle | days | 68.41 | 101.76 | 78.54 | 71.68 | 66.60 | 99.06 | 76.36 | 73.36 | 73.67 | 93.16 | 76.61 | 72.83 | 66.89 | 89.98 | 89.18 | 75.86 | 74.94 | 86.76 | 75.28 | 75.36 |
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 fluctuated over the past few quarters, indicating variations in its efficiency in managing its cash flow and working capital.
The company's cash conversion cycle ranged from a low of 66.60 days to a high of 101.76 days, with the most recent figure reported at 68.41 days as of February 3, 2024. This metric reflects the average time it takes for Ulta Beauty to convert its investments in inventory and accounts receivable into cash received from sales.
A lower cash conversion cycle suggests that Ulta Beauty is more efficient in managing its working capital, turning inventory and receivables into cash quickly. Conversely, a longer cash conversion cycle may indicate inefficiencies in managing working capital, potentially leading to increased costs and liquidity constraints.
It is essential for Ulta Beauty to closely monitor and potentially improve its cash conversion cycle to optimize cash flows, reduce financing costs, and enhance overall financial performance. Regularly tracking this metric and comparing it to industry benchmarks can provide valuable insights into the company's operational efficiency and financial health.
Peer comparison
Feb 3, 2024