Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Ulta Beauty Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-K (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05).
- Current Ratio Trend
- The current ratio shows a relatively stable but declining trend over the observed periods. Initially, it starts at 2.42 and fluctuates downward to about 1.69 in the latest period. There are some short-term rises, notably in mid-2020, but overall the current ratio decreases, indicating a gradual reduction in the company's short-term liquidity position relative to current liabilities.
- Quick Ratio Trend
- The quick ratio also exhibits a downward trend with considerable volatility. Starting at 0.76, it dips to a low of 0.26 by late 2019, before sharply increasing around mid-2020 to exceed 1.20 temporarily. After this peak, the ratio declines again to 0.38 in the most recent quarter. This fluctuation suggests changes in the company’s liquid assets excluding inventories, with occasional improvements but a generally weaker position over time.
- Cash Ratio Trend
- The cash ratio follows a pattern similar to that of the quick ratio, beginning at 0.63 and falling to 0.17 by late 2019. It then rebounds strongly in mid-2020 above 1.0, indicating an increase in cash and cash equivalents relative to current liabilities during that period. Following the peak, the cash ratio declines steadily to 0.26 in the last quarter, reflecting a tighter cash position overall.
- Overall Liquidity Analysis
- Collectively, the liquidity ratios indicate that while the company maintained a relatively strong ability to cover short-term obligations earlier in the timeline, there has been a gradual erosion in liquidity strength. The mid-2020 period stands out as an exceptional time of improved liquidity, possibly linked to specific operational or financing activities. However, the trending declines in all ratios toward the most recent quarters suggest increased liquidity risk or more aggressive asset management. The company's ability to meet short-term liabilities with liquid or near-liquid assets appears more constrained at the end of the analyzed timeframe.
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Current Ratio
Ulta Beauty Inc., current ratio calculation (quarterly data)
| 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 | Feb 2, 2019 | Nov 3, 2018 | Aug 4, 2018 | May 5, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current assets | 2,519,248) | 2,685,980) | 2,709,304) | 2,745,815) | 2,442,913) | 2,531,867) | 2,281,183) | 2,833,693) | 2,494,934) | 2,563,756) | 2,514,777) | 2,245,009) | 2,799,188) | 2,728,820) | 2,055,317) | 2,097,468) | 1,920,600) | 2,019,332) | 1,914,861) | 2,025,973) | 1,830,158) | 1,802,699) | |||||||
| Current liabilities | 1,491,174) | 1,633,900) | 1,681,775) | 1,697,771) | 1,502,054) | 1,599,747) | 1,558,010) | 1,624,116) | 1,381,533) | 1,522,763) | 1,343,713) | 1,230,343) | 1,061,329) | 1,096,179) | 1,137,261) | 1,256,920) | 1,064,934) | 1,045,605) | 823,736) | 984,083) | 758,755) | 745,092) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Current ratio1 | 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 | 2.32 | 2.06 | 2.41 | 2.42 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Amazon.com Inc. | 1.10 | 1.07 | 1.05 | 0.98 | 0.95 | 0.92 | 0.94 | 0.94 | 0.95 | 0.96 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 1.31 | 1.27 | 1.41 | 1.39 | 1.18 | 1.11 | 1.01 | 1.13 | 1.06 | 1.10 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 1.26 | 1.25 | 1.10 | 1.20 | 1.11 | 1.17 | 1.02 | 1.19 | 1.16 | 1.17 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 1.20 | 1.20 | 1.21 | 1.16 | 1.17 | 1.25 | 1.27 | 1.29 | 1.33 | 1.52 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-K (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05).
1 Q2 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 2,519,248 ÷ 1,491,174 = 1.69
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibit an overall increasing trend from May 2018 through July 2023, despite some fluctuations. Starting around 1.8 billion US dollars, current assets generally rise, reaching a peak above 2.8 billion by late 2021 before settling around 2.5 to 2.7 billion in subsequent quarters. Notable spikes occur in mid-2020 and late 2021, indicating periods of enhanced liquidity or asset accumulation.
- Current Liabilities
- Current liabilities demonstrate a consistent upward trajectory from approximately 745 million US dollars in early 2018, peaking around 1.7 billion by late 2022 and early 2023. Following this peak, liabilities show a modest decline in mid-2023. This steady increase in liabilities suggests growing short-term obligations over the observed intervals.
- Current Ratio
- The current ratio shows a declining trend from above 2.4 in early 2018, dropping steadily to levels close to 1.6 between 2022 and 2023. This indicates a gradual reduction in short-term liquidity relative to current liabilities. While the ratio remains above 1.0, suggesting the company maintains the ability to cover short-term obligations, the downward pattern may warrant attention to ensure liquidity sufficiency over time.
- Overall Insights
- The data reflects that although the company has increased its current assets substantially over the years, current liabilities have grown at a relatively faster pace, causing the current ratio to decline. This signals potential pressure on liquidity despite the growth in assets. The peaks in assets during mid-2020 and late 2021 could be attributed to specific strategic or operational factors that temporarily boosted resources. The recent stabilization and slight improvement in the current ratio in 2023 might indicate efforts towards balancing liquidity and liabilities.
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Quick Ratio
Ulta Beauty Inc., quick ratio calculation (quarterly data)
| 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 | Feb 2, 2019 | Nov 3, 2018 | Aug 4, 2018 | May 5, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 388,627) | 636,449) | 737,877) | 250,628) | 434,226) | 654,486) | 431,560) | 605,053) | 770,144) | 947,456) | 1,046,051) | 560,902) | 1,157,318) | 1,043,540) | 392,325) | 208,843) | 177,398) | 326,831) | 409,251) | 296,944) | 237,107) | 231,886) | |||||||
| Short-term investments | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 110,000) | 110,000) | —) | 150,000) | 195,000) | —) | —) | 149,000) | 237,193) | |||||||
| Receivables, net | 174,444) | 190,282) | 199,422) | 200,304) | 180,514) | 192,754) | 233,682) | 169,212) | 154,416) | 154,342) | 193,109) | 136,271) | 127,992) | 88,691) | 139,337) | 112,888) | 107,263) | 110,046) | 136,168) | 102,353) | 103,666) | 100,274) | |||||||
| Total quick assets | 563,071) | 826,731) | 937,299) | 450,932) | 614,740) | 847,240) | 665,242) | 774,265) | 924,560) | 1,101,798) | 1,239,160) | 697,173) | 1,285,310) | 1,242,231) | 641,662) | 321,731) | 434,661) | 631,877) | 545,419) | 399,297) | 489,773) | 569,353) | |||||||
| Current liabilities | 1,491,174) | 1,633,900) | 1,681,775) | 1,697,771) | 1,502,054) | 1,599,747) | 1,558,010) | 1,624,116) | 1,381,533) | 1,522,763) | 1,343,713) | 1,230,343) | 1,061,329) | 1,096,179) | 1,137,261) | 1,256,920) | 1,064,934) | 1,045,605) | 823,736) | 984,083) | 758,755) | 745,092) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Quick ratio1 | 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 | 0.66 | 0.41 | 0.65 | 0.76 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.56 | 0.56 | 0.53 | 0.44 | 0.43 | 0.44 | 0.45 | 0.42 | 0.43 | 0.48 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 0.27 | 0.22 | 0.26 | 0.26 | 0.18 | 0.22 | 0.20 | 0.32 | 0.30 | 0.37 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 0.22 | 0.18 | 0.09 | 0.18 | 0.09 | 0.17 | 0.07 | 0.32 | 0.29 | 0.31 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.49 | 0.53 | 0.59 | 0.35 | 0.40 | 0.49 | 0.64 | 0.65 | 0.77 | 0.95 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-K (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05).
1 Q2 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 563,071 ÷ 1,491,174 = 0.38
2 Click competitor name to see calculations.
- Total Quick Assets
- Total quick assets showed a notable fluctuation over the periods analyzed. Initially, there was a decline from approximately 569 million to around 321 million US dollars between mid-2018 and late 2019. This was followed by a substantial increase beginning in early 2020, peaking at over 1.28 billion US dollars in mid-2020. After this peak, the asset levels generally trended downward with some variability, reaching levels between 450 million and 937 million US dollars in 2023, indicating a cyclical pattern with a significant peak during 2020.
- Current Liabilities
- Current liabilities consistently increased throughout the entire period, rising from roughly 745 million US dollars in mid-2018 to a peak exceeding 1.69 billion US dollars by late 2022. There was a slight decline observed towards mid-2023, with liabilities decreasing to about 1.49 billion US dollars. This upward trajectory in liabilities contrasted with the volatility seen in quick assets.
- Quick Ratio
- The quick ratio exhibited a generally low level over the periods, fluctuating mostly below 1.0, indicating that quick assets were usually less than current liabilities. A significant improvement in liquidity occurred in the early months of 2020, with the ratio rising above 1.0 and peaking at approximately 1.21. Subsequently, the quick ratio reverted to lower levels, often between 0.3 and 0.7, with some periodical decreases, suggesting ongoing liquidity challenges in most quarters, except for the notable improvement in 2020.
- Summary of Financial Position Trends
- The financial data reveals a pattern of increased current liabilities paired with fluctuating rapid asset availability. The peak in quick assets and quick ratio around mid-2020 may reflect a temporary strengthening of liquidity, possibly due to external factors or specific strategic actions. However, this improvement was not sustained, and liquidity ratios have generally remained below ideal levels, potentially signaling ongoing risks in short-term asset coverage relative to liabilities. The growing current liabilities over time suggest a rising short-term debt or obligations load, which, combined with fluctuating liquid asset levels, may require careful monitoring for financial stability.
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Cash Ratio
Ulta Beauty Inc., cash ratio calculation (quarterly data)
| 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 | Feb 2, 2019 | Nov 3, 2018 | Aug 4, 2018 | May 5, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 388,627) | 636,449) | 737,877) | 250,628) | 434,226) | 654,486) | 431,560) | 605,053) | 770,144) | 947,456) | 1,046,051) | 560,902) | 1,157,318) | 1,043,540) | 392,325) | 208,843) | 177,398) | 326,831) | 409,251) | 296,944) | 237,107) | 231,886) | |||||||
| Short-term investments | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 110,000) | 110,000) | —) | 150,000) | 195,000) | —) | —) | 149,000) | 237,193) | |||||||
| Total cash assets | 388,627) | 636,449) | 737,877) | 250,628) | 434,226) | 654,486) | 431,560) | 605,053) | 770,144) | 947,456) | 1,046,051) | 560,902) | 1,157,318) | 1,153,540) | 502,325) | 208,843) | 327,398) | 521,831) | 409,251) | 296,944) | 386,107) | 469,079) | |||||||
| Current liabilities | 1,491,174) | 1,633,900) | 1,681,775) | 1,697,771) | 1,502,054) | 1,599,747) | 1,558,010) | 1,624,116) | 1,381,533) | 1,522,763) | 1,343,713) | 1,230,343) | 1,061,329) | 1,096,179) | 1,137,261) | 1,256,920) | 1,064,934) | 1,045,605) | 823,736) | 984,083) | 758,755) | 745,092) | |||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Cash ratio1 | 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 | 0.50 | 0.30 | 0.51 | 0.63 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.56 | 0.56 | 0.53 | 0.44 | 0.43 | 0.44 | 0.45 | 0.42 | 0.43 | 0.48 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 0.12 | 0.05 | 0.12 | 0.10 | 0.05 | 0.09 | 0.08 | 0.19 | 0.17 | 0.24 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 0.22 | 0.18 | 0.09 | 0.18 | 0.09 | 0.17 | 0.07 | 0.32 | 0.29 | 0.31 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.44 | 0.48 | 0.53 | 0.30 | 0.35 | 0.43 | 0.59 | 0.60 | 0.71 | 0.89 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-K (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05).
1 Q2 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 388,627 ÷ 1,491,174 = 0.26
2 Click competitor name to see calculations.
The analysis of the financial trends reveals several key observations regarding liquidity and short-term financial health over the periods under review.
- Total Cash Assets
- The total cash assets demonstrate significant volatility across the periods. Initially, cash holdings decline sharply from 469,079 thousand US dollars in May 2018 to a low of 208,843 thousand US dollars by November 2019. A marked increase follows, peaking at over 1,157,318 thousand US dollars in August 2020. After this peak, cash assets experience a general downward trend, punctuated by occasional increases, ending at 388,627 thousand US dollars by July 2023. This fluctuation indicates a dynamic cash management strategy possibly responsive to operational needs or external factors.
- Current Liabilities
- Current liabilities show an overall increasing trend with some fluctuations. Starting at 745,092 thousand US dollars in May 2018, current liabilities rise steadily to reach a maximum of approximately 1,693,900 thousand US dollars by January 2023. There is a slight decline following this peak, with liabilities at 1,491,174 thousand US dollars by July 2023. The increasing level of current liabilities over time suggests growing short-term obligations, which may reflect expanded business activity or increased reliance on short-term financing.
- Cash Ratio
- The cash ratio, which measures the ability to cover current liabilities with cash assets, exhibits pronounced volatility and a generally low level throughout the periods. Initially, the ratio stands at a moderate 0.63 in May 2018 but declines to a low of 0.15 by October 2022, indicating reduced liquidity relative to liabilities. A temporary improvement occurs around May and August 2020, where the ratio surpasses 1.00, indicating strong liquidity positions during this interval. However, post this period, the ratio mostly remains below 0.5, with the recent figures at 0.26 in July 2023, reflecting relatively weak cash coverage of current liabilities.
Overall, the data indicates that while there was a period of strong liquidity during mid-2020, the company has generally maintained a low cash ratio in relation to its current liabilities. The upward trend in current liabilities combined with fluctuations in cash assets suggests a potentially increasing pressure on short-term liquidity. This dynamic merits close monitoring to ensure sufficient cash reserves are maintained to meet obligations as they come due.
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