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Ulta Salon Cosmetics & Fragrances Inc (NAS:ULTA)
Beneish M-Score
-2.69 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Ulta Salon Cosmetics & Fragrances Inc has a M-score of -2.69 suggests that the company is not a manipulator.

ULTA' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -2.63
Current: -2.69

-3.33
-2.63

During the past 13 years, the highest Beneish M-Score of Ulta Salon Cosmetics & Fragrances Inc was -2.63. The lowest was -3.33. And the median was -2.69.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Ulta Salon Cosmetics & Fragrances Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9183+0.528 * 1.005+0.404 * 1.0645+0.892 * 1.2137+0.115 * 0.9754
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9752+4.679 * -0.0705-0.327 * 1.0892
=-2.69

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $52 Mil.
Revenue was 1047.641 + 745.722 + 734.236 + 713.77 = $3,241 Mil.
Gross Profit was 349.737 + 281.755 + 259.342 + 245.953 = $1,137 Mil.
Total Current Assets was $1,260 Mil.
Total Assets was $1,983 Mil.
Property, Plant and Equipment(Net PPE) was $717 Mil.
Depreciation, Depletion and Amortization(DDA) was $132 Mil.
Selling, General & Admin. Expense(SGA) was $726 Mil.
Total Current Liabilities was $360 Mil.
Long-Term Debt was $0 Mil.
Net Income was 87.264 + 59.124 + 60.794 + 49.953 = $257 Mil.
Non Operating Income was 0 + 0 + 0.418 + 0 = $0 Mil.
Cash Flow from Operations was 250.442 + 12.922 + 59.535 + 73.693 = $397 Mil.
Accounts Receivable was $47 Mil.
Revenue was 868.082 + 618.781 + 600.998 + 582.712 = $2,671 Mil.
Gross Profit was 293.561 + 231.661 + 212.077 + 203.949 = $941 Mil.
Total Current Assets was $1,003 Mil.
Total Assets was $1,603 Mil.
Property, Plant and Equipment(Net PPE) was $596 Mil.
Depreciation, Depletion and Amortization(DDA) was $106 Mil.
Selling, General & Admin. Expense(SGA) was $614 Mil.
Total Current Liabilities was $267 Mil.
Long-Term Debt was $0 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(52.44 / 3241.369) / (47.049 / 2670.573)
=0.01617835 / 0.01761757
=0.9183

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(281.755 / 2670.573) / (349.737 / 3241.369)
=0.3524517 / 0.350712
=1.005

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1260.355 + 717.159) / 1983.17) / (1 - (1002.697 + 595.736) / 1602.727)
=0.002852 / 0.00267918
=1.0645

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=3241.369 / 2670.573
=1.2137

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(106.283 / (106.283 + 595.736)) / (131.764 / (131.764 + 717.159))
=0.15139619 / 0.15521313
=0.9754

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(726.372 / 3241.369) / (613.66 / 2670.573)
=0.2240942 / 0.22978589
=0.9752

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((0 + 359.594) / 1983.17) / ((0 + 266.811) / 1602.727)
=0.18132283 / 0.16647314
=1.0892

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(257.135 - 0.418 - 396.592) / 1983.17
=-0.0705

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Ulta Salon Cosmetics & Fragrances Inc has a M-score of -2.69 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


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

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
DSRI 0.89920.92490.74420.94220.9183
GMI 0.96631.00161.02851.00151.005
AQI 0.89680.658201.19211.0645
SGI 1.3041.2081.18911.20281.2137
DEPI 0.92571.08270.95651.02010.9754
SGAI 1.03281.00530.99961.01290.9752
LVGI 0.9830.99980.90630.96031.0892
TATA -0.0879-0.0363-0.0878-0.0779-0.0703
M-score -2.78-2.66-3.32-2.63-2.69

Ulta Salon Cosmetics & Fragrances Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 0.94220.74231.13320.88090.9183
GMI 1.00150.99921.00181.00371.005
AQI 1.19211.0551.12111.04461.0645
SGI 1.20281.2031.19881.19541.2137
DEPI 1.02010.99480.97980.95050.9754
SGAI 1.0181.01440.9980.98310.9752
LVGI 0.96030.95531.00861.02641.0892
TATA -0.0779-0.0869-0.0843-0.0695-0.0705
M-score -2.63-2.91-2.53-2.73-2.69
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