Ulta Beauty Inc (ULTA)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.71 | 1.52 | 1.69 | 1.64 | 1.61 | 1.62 | 1.63 | 1.58 | 1.46 | 1.74 | 1.81 | 1.68 | 1.87 | 1.82 | 2.64 | 2.49 | 1.81 | 1.67 | 1.80 | 1.93 |
| Quick ratio | 0.59 | 0.18 | 0.38 | 0.51 | 0.56 | 0.27 | 0.41 | 0.53 | 0.43 | 0.48 | 0.67 | 0.72 | 0.92 | 0.57 | 1.21 | 1.13 | 0.56 | 0.26 | 0.41 | 0.60 |
| Cash ratio | 0.46 | 0.07 | 0.26 | 0.39 | 0.44 | 0.15 | 0.29 | 0.41 | 0.28 | 0.37 | 0.56 | 0.62 | 0.78 | 0.46 | 1.09 | 1.05 | 0.44 | 0.17 | 0.31 | 0.50 |
Ulta Beauty Inc's liquidity ratios show mixed performance over the period under consideration.
1. Current Ratio: The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 1, indicating that Ulta Beauty has had sufficient current assets to meet its short-term obligations. The ratio peaked at 2.64 in August 2020, reflecting strong liquidity, but has since fluctuated, with a slight downward trend observed in recent periods.
2. Quick Ratio: The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has shown significant volatility over time. The ratio has been below 1 in most periods, suggesting that Ulta Beauty may have had difficulty meeting its immediate obligations without relying on inventory. The quick ratio hit a low of 0.18 in October 2023 before rebounding to 1.21 in August 2020.
3. Cash Ratio: The cash ratio, which indicates the ability of the company to cover its current liabilities with cash and cash equivalents, has also displayed variability. Ulta Beauty's cash ratio has generally been below 1, indicating that its cash and equivalents may not be sufficient to cover immediate obligations. The ratio reached a peak of 1.09 in May 2020 following a downward trend and has since fluctuated around the 0.50 mark.
Overall, while Ulta Beauty Inc has maintained a current ratio above 1, signaling a reasonable liquidity position, the company's quick and cash ratios indicate potential liquidity challenges in meeting short-term obligations without relying on inventory or increasing cash reserves. Monitoring these ratios closely will be essential for assessing the company's ability to manage liquidity effectively in the future.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Ulta Beauty Inc has varied over the past several reporting periods. The cash conversion cycle represents the time it takes for the company to convert its investments in inventory back into cash.
Based on the data provided, Ulta Beauty Inc's cash conversion cycle has ranged from about 66 to 101 days over the last few years, with fluctuations observed between periods. A shorter cash conversion cycle indicates that a company is able to sell its inventory quickly and collect cash from customers promptly. Conversely, a longer cash conversion cycle could imply inefficiencies in managing inventory, sales, or collection processes.
It is important for Ulta Beauty Inc to monitor and manage its cash conversion cycle effectively to optimize its working capital and liquidity. By reducing the cycle time, the company can improve cash flow and potentially enhance its overall financial performance. Analyzing trends in the cash conversion cycle can provide insights into the company's operational efficiency and effectiveness in managing its resources.