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

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Ulta Salon Cosmetics & Fragrances Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

ULTA' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 5

4
8

During the past 12 years, the highest Piotroski F-Score of Ulta Salon Cosmetics & Fragrances Inc was 8. The lowest was 4. And the median was 7.


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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was 45.43 + 70.682 + 49.953 + 60.794 = $227 Mil.
Cash Flow from Operations was 15.613 + 227.592 + 73.693 + 59.535 = $376 Mil.
Revenue was 618.781 + 868.082 + 713.77 + 734.236 = $2,935 Mil.
Gross Profit was 231.661 + 293.561 + 245.953 + 259.342 = $1,031 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(1391.992 + 1535.347 + 1602.727 + 1699.225 + 1779.812) / 5 = $1,602 Mil.
Total Assets was $1,780 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,128 Mil.
Total Current Liabilities was $300 Mil.
Net Income was 38.151 + 64.532 + 41.826 + 44.911 = $189 Mil.

Revenue was 505.64 + 758.835 + 582.712 + 600.998 = $2,448 Mil.
Gross Profit was 185.493 + 259.644 + 203.949 + 212.077 = $861 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(1038.769 + 1233.246 + 1275.249 + 1331.577 + 1391.992) / 5 = $1,254 Mil.
Total Assets was $1,392 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $847 Mil.
Total Current Liabilities was $233 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Ulta Salon Cosmetics & Fragrances Inc's current net income (ttm) was 227. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Ulta Salon Cosmetics & Fragrances Inc's current cash flow from operations (ttm) was 376. ==> Positive ==> Score 1.

Q3. 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)/Average Total Assets from Jul13 to Jul14
=226.859/1601.8206
=0.14162572

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jul12 to Jul13
=189.42/1254.1666
=0.15103257

Ulta Salon Cosmetics & Fragrances Inc's return on assets of this year was 0.14162572. Ulta Salon Cosmetics & Fragrances Inc's return on assets of last year was 0.15103257. ==> Last year is higher ==> Score 0.

Q4. 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 227. Ulta Salon Cosmetics & Fragrances Inc's current cash flow from operations (ttm) was 376. ==> 376 > 227 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

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

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

Gearing (This Year: Jul14)=Long-Term Debt/Total Assets
=0/1779.812
=0

Gearing (Last Year: Jul13)=Long-Term Debt/Total Assets
=0/1391.992
=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.

Q6. 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: Jul14)=Total Current Assets/Total Current Liabilities
=1127.693/300.141
=3.75721078

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=846.787/232.745
=3.63826076

Ulta Salon Cosmetics & Fragrances Inc's current ratio of this year was 3.75721078. Ulta Salon Cosmetics & Fragrances Inc's current ratio of last year was 3.63826076. ==> This year's current ratio is higher. ==> Score 1.

Q7. 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 64.3. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Q8. 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
=1030.517/2934.869
=0.35112879

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=861.163/2448.185
=0.35175569

Ulta Salon Cosmetics & Fragrances Inc's gross margin of this year was 0.35112879. Ulta Salon Cosmetics & Fragrances Inc's gross margin of last year was 0.35175569. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from Jul13 to Jul14
=2934.869/1601.8206
=1.8322083

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jul12 to Jul13
=2448.185/1254.1666
=1.9520413

Ulta Salon Cosmetics & Fragrances Inc's asset turnover of this year was 1.8322083. Ulta Salon Cosmetics & Fragrances Inc's asset turnover of last year was 1.9520413. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+1+0+0+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Ulta Salon Cosmetics & Fragrances Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.


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, Altman Z-Score, Beneish M-Score


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

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111
Q2 1111111
Q3 001
Q4 111
Q5 111
Q6 111
Q7 000
Q8 010
Q9 101
F-score 667

Ulta Salon Cosmetics & Fragrances Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1111111111
Q2 1111111111
Q3 1111110000
Q4 1111111111
Q5 1111111111
Q6 0111101111
Q7 0000000100
Q8 1111111010
Q9 0000000000
F-score 6777766665
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