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Ulta Salon Cosmetics & Fragrances Inc (NAS:ULTA)
Beneish M-Score
-2.92 (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 -2.92 suggests that the company is not a manipulator.

ULTA' s 10-Year Beneish M-Score Range
Min: -4.08   Max: -2.63
Current: -2.92

-4.08
-2.63

During the past 12 years, the highest Beneish M-Score of Ulta Salon Cosmetics & Fragrances Inc was -2.63. The lowest was -4.08. And the median was -3.32.


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 * 0.7423+0.528 * 0.9992+0.404 * 1.055+0.892 * 1.203+0.115 * 0.9948
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0504+4.679 * -0.087-0.327 * 0.9553
=-2.92

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $27 Mil.
Revenue was 713.77 + 868.082 + 618.781 + 600.998 = $2,802 Mil.
Gross Profit was 245.953 + 293.561 + 231.661 + 212.077 = $983 Mil.
Total Current Assets was $1,090 Mil.
Total Assets was $1,699 Mil.
Property, Plant and Equipment(Net PPE) was $604 Mil.
Depreciation, Depletion and Amortization(DDA) was $112 Mil.
Selling, General & Admin. Expense(SGA) was $642 Mil.
Total Current Liabilities was $302 Mil.
Long-Term Debt was $0 Mil.
Net Income was 49.953 + 70.682 + 45.43 + 44.911 = $211 Mil.
Non Operating Income was 0 + 0.138 + 0.014 + 0.036 = $0 Mil.
Cash Flow from Operations was 73.693 + 227.592 + 15.613 + 41.685 = $359 Mil.
Accounts Receivable was $30 Mil.
Revenue was 582.712 + 758.835 + 505.64 + 481.683 = $2,329 Mil.
Gross Profit was 203.949 + 259.644 + 185.493 + 167.625 = $817 Mil.
Total Current Assets was $829 Mil.
Total Assets was $1,332 Mil.
Property, Plant and Equipment(Net PPE) was $499 Mil.
Depreciation, Depletion and Amortization(DDA) was $92 Mil.
Selling, General & Admin. Expense(SGA) was $508 Mil.
Total Current Liabilities was $248 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)
=(26.722 / 2801.631) / (29.925 / 2328.87)
=0.00953802 / 0.01284958
=0.7423

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)
=(293.561 / 2328.87) / (245.953 / 2801.631)
=0.35068982 / 0.350957
=0.9992

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 - (1090.49 + 603.933) / 1699.225) / (1 - (828.615 + 499.395) / 1331.577)
=0.00282599 / 0.00267878
=1.055

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
=2801.631 / 2328.87
=1.203

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))
=(92.027 / (92.027 + 499.395)) / (111.977 / (111.977 + 603.933))
=0.15560294 / 0.15641212
=0.9948

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)
=(642.478 / 2801.631) / (508.462 / 2328.87)
=0.22932285 / 0.21832992
=1.0504

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 + 302.419) / 1699.225) / ((0 + 248.067) / 1331.577)
=0.17797466 / 0.18629565
=0.9553

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
=(210.976 - 0.188 - 358.583) / 1699.225
=-0.087

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 -2.92 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

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 0.89920.92490.74420.9422
GMI 0.96631.00161.02851.0015
AQI 0.89680.658201.1921
SGI 1.3041.2081.18911.2028
DEPI 0.92571.08270.95651.0201
SGAI 1.03281.00530.99961.0436
LVGI 0.9830.99980.90630.9603
TATA -0.0879-0.0363-0.0878-0.0781
M-score -2.78-2.66-3.32-2.63

Ulta Salon Cosmetics & Fragrances Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 0.94220.7423
GMI 1.00150.9992
AQI 1.19211.055
SGI 1.20281.203
DEPI 1.02010.9948
SGAI 1.03811.0504
LVGI 0.96030.9553
TATA -0.078-0.087
M-score -2.63-2.92
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