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Ulta Salon Cosmetics & Fragrance Inc (NAS:ULTA)
Beneish M-Score
-2.28 (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 & Fragrance Inc has a M-score of -2.28 suggests that the company is not a manipulator.

ULTA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.32   Max: -2.28
Current: -2.28

-3.32
-2.28

During the past 13 years, the highest Beneish M-Score of Ulta Salon Cosmetics & Fragrance Inc was -2.28. The lowest was -3.32. And the median was -2.76.


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 & Fragrance 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 * 1.0237+0.528 * 0.9941+0.404 * 1.2801+0.892 * 1.2106+0.115 * 0.9523
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9985+4.679 * -0.0256-0.327 * 0.9795
=-2.28

* 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:
Accounts Receivable was $65 Mil.
Revenue was 1268.295 + 910.7 + 876.999 + 868.122 = $3,924 Mil.
Gross Profit was 439.036 + 335.638 + 306.475 + 303.184 = $1,384 Mil.
Total Current Assets was $1,375 Mil.
Total Assets was $2,231 Mil.
Property, Plant and Equipment(Net PPE) was $848 Mil.
Depreciation, Depletion and Amortization(DDA) was $165 Mil.
Selling, General & Admin. Expense(SGA) was $878 Mil.
Total Current Liabilities was $396 Mil.
Long-Term Debt was $0 Mil.
Net Income was 107.823 + 71.07 + 74.169 + 66.946 = $320 Mil.
Non Operating Income was 0.546 + 0 + 0 + 0.622 = $1 Mil.
Cash Flow from Operations was 226.901 + 23.277 + 57.404 + 68.292 = $376 Mil.
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.



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)
=(64.992 / 3924.116) / (52.44 / 3241.369)
=0.0165622 / 0.01617835
=1.0237

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)
=(335.638 / 3241.369) / (439.036 / 3924.116)
=0.350712 / 0.35277576
=0.9941

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 - (1375.173 + 847.6) / 2230.918) / (1 - (1260.355 + 717.159) / 1983.17)
=0.00365096 / 0.002852
=1.2801

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
=3924.116 / 3241.369
=1.2106

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))
=(131.764 / (131.764 + 717.159)) / (165.049 / (165.049 + 847.6))
=0.15521313 / 0.16298737
=0.9523

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)
=(878.036 / 3924.116) / (726.372 / 3241.369)
=0.22375383 / 0.2240942
=0.9985

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 + 396.227) / 2230.918) / ((0 + 359.594) / 1983.17)
=0.17760716 / 0.18132283
=0.9795

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
=(320.008 - 1.168 - 375.874) / 2230.918
=-0.0256

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 & Fragrance Inc has a M-score of -2.28 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 & Fragrance Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 0.92490.74420.94220.91831.0237
GMI 1.00161.02851.00151.0050.9941
AQI 0.658201.19211.06451.2801
SGI 1.2081.18911.20281.21371.2106
DEPI 1.08270.95651.02010.97540.9523
SGAI 1.00530.99961.01290.97520.9985
LVGI 0.99980.90630.96031.08920.9795
TATA -0.046-0.0878-0.0779-0.0703-0.025
M-score -2.71-3.32-2.63-2.69-2.28

Ulta Salon Cosmetics & Fragrance Inc Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
DSRI 0.94220.74231.13320.88090.91831.34490.89180.85251.0237
GMI 1.00150.99921.00181.00371.0050.99811.00111.00930.9941
AQI 1.19211.0551.12111.04461.06451.37681.27421.26941.2801
SGI 1.20281.2031.19881.19541.21371.21211.20571.20961.2106
DEPI 1.02010.99480.97980.95050.97540.99280.98960.99230.9523
SGAI 1.0181.01440.9980.98310.97520.9720.97780.97840.9985
LVGI 0.96030.95531.00861.02641.08921.03741.03751.06330.9795
TATA -0.0779-0.0871-0.0843-0.0695-0.0705-0.0566-0.0483-0.0449-0.0256
M-score -2.63-2.91-2.53-2.73-2.69-2.10-2.52-2.54-2.28
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