Ulta Beauty Inc (ULTA)
Liquidity ratios
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.70 | 1.63 | 1.76 | 1.76 | 1.71 | 1.71 | 1.52 | 1.52 | 1.69 | 1.69 | 1.64 | 1.64 | 1.61 | 1.61 | 1.62 | 1.62 | 1.63 | 1.63 | 1.58 | 1.46 |
| Quick ratio | 0.40 | 0.10 | 0.26 | 0.33 | 0.59 | 0.46 | 0.07 | 0.18 | 0.29 | 0.38 | 0.41 | 0.51 | 0.44 | 0.56 | 0.15 | 0.27 | 0.29 | 0.41 | 0.41 | 0.41 |
| Cash ratio | 0.40 | 0.10 | 0.26 | 0.33 | 0.46 | 0.46 | 0.07 | 0.07 | 0.29 | 0.26 | 0.41 | 0.39 | 0.44 | 0.44 | 0.15 | 0.15 | 0.29 | 0.29 | 0.41 | 0.41 |
Ulta Beauty Inc's liquidity ratios show a relatively stable current ratio over the period, ranging from 1.46 to 1.76. The current ratio indicates the company's ability to cover its short-term liabilities with its current assets. Generally, a current ratio above 1 is considered healthy, as it suggests the company can meet its short-term obligations. Ulta's current ratio consistently above 1 reflects a strong liquidity position.
However, the quick ratio, which measures the company's ability to meet its short-term liabilities using only its most liquid assets, shows more fluctuations, ranging from 0.07 to 0.59. A quick ratio below 1 may indicate potential difficulties in meeting short-term obligations without relying on inventory sales, which can be a less liquid form of assets. Ulta's quick ratio seems to have improved towards the end of the period after some fluctuations.
The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, also shows fluctuations but generally improving trends in the latter periods. The cash ratio ranges from 0.07 to 0.46. A higher cash ratio signifies a stronger ability to cover short-term liabilities solely with cash on hand.
Overall, Ulta Beauty Inc's liquidity ratios indicate a solid ability to cover its short-term obligations with its current assets, with varying levels of reliance on less liquid assets to meet these obligations.
See also:
Additional liquidity measure
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 103.99 | 123.89 | 95.25 | 91.78 | 62.98 | 94.29 | 139.67 | 109.61 | 106.35 | 76.18 | 88.93 | 65.13 | 86.32 | 66.89 | 140.60 | 104.94 | 104.05 | 70.29 | 95.30 | 94.08 |
Ulta Beauty Inc's cash conversion cycle is a key metric that measures the average number of days it takes for the company to convert its investments in inventory into cash receipts from customers. Looking at the historical trend of Ulta Beauty Inc's cash conversion cycle data, we observe fluctuations in the efficiency of its cash conversion process over time.
From January 31, 2022, to October 29, 2022, Ulta Beauty Inc's cash conversion cycle ranged from 94.08 days to 104.94 days, indicating a relatively stable operational performance during this period. However, there was a significant increase in the cash conversion cycle to 140.60 days on October 31, 2022, suggesting a delay in collecting cash from customers compared to previous periods.
Subsequently, there was a partial improvement in the company's cash conversion cycle, with fluctuations between 66.89 days and 106.35 days from January 28, 2023, to July 31, 2023. The cycle peaked again at 139.67 days on October 31, 2023, reflecting potential challenges in managing inventory and accounts receivable effectively.
The period from January 31, 2024, to January 31, 2025, saw fluctuations in Ulta Beauty Inc's cash conversion cycle, ranging from 62.98 days to 123.89 days. Overall, the company experienced variability in its cash conversion efficiency, with improvements and setbacks observed throughout the analyzed periods.
It is recommended that Ulta Beauty Inc closely monitors its inventory management, sales processes, and accounts receivable collection to optimize its cash conversion cycle and enhance overall liquidity and operational effectiveness.