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

ULTA' s Piotroski F-Score Range Over the Past 10 Years
Min: 5   Max: 8
Current: 7

5
8

During the past 13 years, the highest Piotroski F-Score of Ulta Salon Cosmetics & Fragrance 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 (Jan16) TTM:Last Year (Jan15) TTM:
Net Income was 66.946 + 74.169 + 71.07 + 107.823 = $320 Mil.
Cash Flow from Operations was 68.292 + 57.404 + 23.277 + 226.901 = $376 Mil.
Revenue was 868.122 + 876.999 + 910.7 + 1268.295 = $3,924 Mil.
Gross Profit was 303.184 + 306.475 + 335.638 + 439.036 = $1,384 Mil.
Average Total Assets from the begining of this year (Jan15)
to the end of this year (Jan16) was
(1983.17 + 2077.951 + 2115.91 + 2239.998 + 2230.918) / 5 = $2129.5894 Mil.
Total Assets at the begining of this year (Jan15) was $1,983 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,375 Mil.
Total Current Liabilities was $396 Mil.
Net Income was 49.953 + 60.794 + 59.124 + 87.264 = $257 Mil.

Revenue was 713.77 + 734.236 + 745.722 + 1047.641 = $3,241 Mil.
Gross Profit was 245.953 + 259.342 + 281.755 + 349.737 = $1,137 Mil.
Average Total Assets from the begining of last year (Jan14)
to the end of last year (Jan15) was
(1602.727 + 1699.225 + 1779.812 + 1922.759 + 1983.17) / 5 = $1797.5386 Mil.
Total Assets at the begining of last year (Jan14) was $1,603 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,260 Mil.
Total Current Liabilities was $360 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 & Fragrance Inc's current net income (TTM) was 320. ==> 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 & Fragrance Inc's current cash flow from operations (TTM) was 376. ==> 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 (Jan15)
=320.008/1983.17
=0.16136186

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan14)
=257.135/1602.727
=0.16043593

Ulta Salon Cosmetics & Fragrance Inc's return on assets of this year was 0.16136186. Ulta Salon Cosmetics & Fragrance Inc's return on assets of last year was 0.16043593. ==> 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 & Fragrance Inc's current net income (TTM) was 320. Ulta Salon Cosmetics & Fragrance Inc's current cash flow from operations (TTM) was 376. ==> 376 > 320 ==> 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: Jan16)=Long-Term Debt/Average Total Assets from Jan15 to Jan16
=0/2129.5894
=0

Gearing (Last Year: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=0/1797.5386
=0

Ulta Salon Cosmetics & Fragrance Inc's gearing of this year was 0. Ulta Salon Cosmetics & Fragrance 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: Jan16)=Total Current Assets/Total Current Liabilities
=1375.173/396.227
=3.47066959

Current Ratio (Last Year: Jan15)=Total Current Assets/Total Current Liabilities
=1260.355/359.594
=3.5049389

Ulta Salon Cosmetics & Fragrance Inc's current ratio of this year was 3.47066959. Ulta Salon Cosmetics & Fragrance Inc's current ratio of last year was 3.5049389. ==> 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 & Fragrance Inc's number of shares in issue this year was 64.3. Ulta Salon Cosmetics & Fragrance Inc's number of shares in issue last year was 64.7. ==> 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
=1384.333/3924.116
=0.35277576

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1136.787/3241.369
=0.350712

Ulta Salon Cosmetics & Fragrance Inc's gross margin of this year was 0.35277576. Ulta Salon Cosmetics & Fragrance Inc's gross margin of last year was 0.350712. ==> 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 (Jan15)
=3924.116/1983.17
=1.97870883

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan14)
=3241.369/1602.727
=2.02240868

Ulta Salon Cosmetics & Fragrance Inc's asset turnover of this year was 1.97870883. Ulta Salon Cosmetics & Fragrance Inc's asset turnover of last year was 2.02240868. ==> 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 & Fragrance 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 & Fragrance Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Question 1 111111111
Question 2 111111111
Question 3 001111011
Question 4 111111111
Question 5 111111111
Question 6 010111100
Question 7 000000001
Question 8 001111001
Question 9 100100000
F-score 556877557

Ulta Salon Cosmetics & Fragrance Inc Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
Question 1 1111111111
Question 2 1111111111
Question 3 0000011001
Question 4 1111111111
Question 5 1111111111
Question 6 1111100000
Question 7 0000001111
Question 8 1010001001
Question 9 0000000000
F-score 6565557557
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