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Ulta Salon Cosmetics & Fragrances Inc (NAS:ULTA)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Ulta Salon Cosmetics & Fragrances Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

ULTA' s 10-Year Piotroski F-Score Range
Min: 5   Max: 8
Current: 7

5
8

During the past 13 years, the highest Piotroski F-Score of Ulta Salon Cosmetics & Fragrances Inc was 8. The lowest was 5. And the median was 6.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Net Income was 60.794 + 59.124 + 87.264 + 66.946 = $274 Mil.
Cash Flow from Operations was 59.535 + 12.922 + 250.442 + 68.292 = $391 Mil.
Revenue was 734.236 + 745.722 + 1047.641 + 868.122 = $3,396 Mil.
Gross Profit was 259.342 + 281.755 + 349.737 + 303.184 = $1,194 Mil.
Average Total Assets from the begining of this year (Apr14)
to the end of this year (Apr15) was
(1699.225 + 1779.812 + 1922.759 + 1983.17 + 2077.951) / 5 = $1892.5834 Mil.
Total Assets at the begining of this year (Apr14) was $1,699 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,325 Mil.
Total Current Liabilities was $384 Mil.
Net Income was 44.911 + 45.43 + 70.682 + 49.953 = $211 Mil.

Revenue was 600.998 + 618.781 + 868.082 + 713.77 = $2,802 Mil.
Gross Profit was 212.077 + 231.661 + 293.561 + 245.953 = $983 Mil.
Average Total Assets from the begining of last year (Apr13)
to the end of last year (Apr14) was
(1331.577 + 1391.992 + 1535.347 + 1602.727 + 1699.225) / 5 = $1512.1736 Mil.
Total Assets at the begining of last year (Apr13) was $1,332 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,090 Mil.
Total Current Liabilities was $302 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Ulta Salon Cosmetics & Fragrances Inc's current net income (TTM) was 274. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Ulta Salon Cosmetics & Fragrances Inc's current cash flow from operations (TTM) was 391. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Apr14)
=274.128/1699.225
=0.16132531

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Apr13)
=210.976/1331.577
=0.15844071

Ulta Salon Cosmetics & Fragrances Inc's return on assets of this year was 0.16132531. Ulta Salon Cosmetics & Fragrances Inc's return on assets of last year was 0.15844071. ==> This year is higher. ==> Score 1.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Ulta Salon Cosmetics & Fragrances Inc's current net income (TTM) was 274. Ulta Salon Cosmetics & Fragrances Inc's current cash flow from operations (TTM) was 391. ==> 391 > 274 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Apr15)=Long-Term Debt/Average Total Assets from Apr14 to Apr15
=0/1892.5834
=0

Gearing (Last Year: Apr14)=Long-Term Debt/Average Total Assets from Apr13 to Apr14
=0/1512.1736
=0

Ulta Salon Cosmetics & Fragrances Inc's gearing of this year was 0. Ulta Salon Cosmetics & Fragrances Inc's gearing of last year was 0. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Apr15)=Total Current Assets/Total Current Liabilities
=1325.201/383.664
=3.45406658

Current Ratio (Last Year: Apr14)=Total Current Assets/Total Current Liabilities
=1090.49/302.419
=3.60589116

Ulta Salon Cosmetics & Fragrances Inc's current ratio of this year was 3.45406658. Ulta Salon Cosmetics & Fragrances Inc's current ratio of last year was 3.60589116. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Ulta Salon Cosmetics & Fragrances Inc's number of shares in issue this year was 64.6. Ulta Salon Cosmetics & Fragrances Inc's number of shares in issue last year was 64.6. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=1194.018/3395.721
=0.35162429

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=983.252/2801.631
=0.350957

Ulta Salon Cosmetics & Fragrances Inc's gross margin of this year was 0.35162429. Ulta Salon Cosmetics & Fragrances Inc's gross margin of last year was 0.350957. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Apr14)
=3395.721/1699.225
=1.99839397

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Apr13)
=2801.631/1331.577
=2.10399474

Ulta Salon Cosmetics & Fragrances Inc's asset turnover of this year was 1.99839397. Ulta Salon Cosmetics & Fragrances Inc's asset turnover of last year was 2.10399474. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+1+0+1+1+0
=7

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Ulta Salon Cosmetics & Fragrances Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Ulta Salon Cosmetics & Fragrances Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
Question 1 11111111
Question 2 11111111
Question 3 00111101
Question 4 11111111
Question 5 11111111
Question 6 01011110
Question 7 01000010
Question 8 10111100
Question 9 10010000
F-score 66687765

Ulta Salon Cosmetics & Fragrances Inc Quarterly Data

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
Question 1 1111111111
Question 2 1111111111
Question 3 1010000011
Question 4 1111111111
Question 5 1111111111
Question 6 1101111100
Question 7 0000100001
Question 8 1111010001
Question 9 0000000000
F-score 7666665557
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