Stock Analysis on Net

Ulta Beauty Inc. (NASDAQ:ULTA)

This company has been moved to the archive! The financial data has not been updated since August 24, 2023.

Financial Reporting Quality: Aggregate Accruals 

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Ulta Beauty Inc., balance sheet computation of aggregate accruals

US$ in thousands

Microsoft Excel
Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Operating Assets
Total assets 5,370,411 4,764,379 5,089,969 4,863,872 3,191,172 2,908,687
Less: Cash and cash equivalents 737,877 431,560 1,046,051 392,325 409,251 277,445
Less: Short-term investments 110,000 120,000
Operating assets 4,632,534 4,332,819 4,043,918 4,361,547 2,781,921 2,511,242
Operating Liabilities
Total liabilities 3,410,600 3,229,006 3,090,420 2,961,778 1,370,954 1,134,470
Operating liabilities 3,410,600 3,229,006 3,090,420 2,961,778 1,370,954 1,134,470
 
Net operating assets1 1,221,934 1,103,813 953,498 1,399,769 1,410,967 1,376,772
Balance-sheet-based aggregate accruals2 118,121 150,315 (446,271) (11,198) 34,195
Financial Ratio
Balance-sheet-based accruals ratio3 10.16% 14.61% -37.93% -0.80% 2.45%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Amazon.com Inc. 18.01% 32.91% 49.06% 18.08%
Home Depot Inc. 15.25% 9.91% 21.77% 2.66%
Lowe’s Cos. Inc. -2.92% 2.66% -12.39% 6.39%
TJX Cos. Inc. 30.23% 73.65% -109.84% 15.53%
Balance-Sheet-Based Accruals Ratio, Sector
Consumer Discretionary Distribution & Retail 16.15% 26.47% 31.88% 12.49% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Discretionary 11.73% 12.34% 15.91% 5.08% 200.00%

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 4,632,5343,410,600 = 1,221,934

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 1,221,9341,103,813 = 118,121

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 118,121 ÷ [(1,221,934 + 1,103,813) ÷ 2] = 10.16%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Ulta Beauty Inc. improved earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

Ulta Beauty Inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel
Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Net income 1,242,408 985,837 175,835 705,945 658,559 555,234
Less: Net cash provided by operating activities 1,481,915 1,059,265 810,355 1,101,293 956,127 779,366
Less: Net cash used in investing activities (314,584) (176,484) (48,751) (471,480) (215,107) (530,714)
Cash-flow-statement-based aggregate accruals 75,077 103,056 (585,769) 76,132 (82,461) 306,582
Financial Ratio
Cash-flow-statement-based accruals ratio1 6.46% 10.02% -49.78% 5.42% -5.92%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Amazon.com Inc. -2.63% -8.54% 48.44% 23.04%
Home Depot Inc. 14.43% 8.24% 14.26% 0.66%
Lowe’s Cos. Inc. -4.62% -0.14% -17.28% 6.85%
TJX Cos. Inc. 23.97% 55.57% -121.39% 14.48%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Consumer Discretionary Distribution & Retail 0.41% -4.02% 29.06% 14.86% -9.94%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Discretionary 4.90% 1.96% 12.28% 3.83% -8.48%

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 75,077 ÷ [(1,221,934 + 1,103,813) ÷ 2] = 6.46%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Ulta Beauty Inc. improved earnings quality from 2022 to 2023.