Ulta Beauty Essay

Business knowledge gained from financial statements and sheets, provide organizations like Ulta Beauty, Inc. adequate data that equips them when necessary information to budget for the company’s future success. By evaluating the performance of the business, long term and short term decisions are made to ensure a strong financial foundation. The methods utilized to analyze finances help managers and executives understand the importance of their decisions and how they impact the business financially. Via the company’s financial records, the information gathered grants a valuable tool for calculating ratios and measuring the progress against both long and short term goals. Whereas some of these ratios from the financial analysis performed

The two founders, once executives at Osco Drug, became business partners and launched a business plan made to revolutionize how women shop for cosmetics (Kukec, 2017). George, once the president of Osco, had developed a new retail concept that would offer high-end cosmetics and fragrances, including services like hair salons and nails. The idea was to provide an easy and convenient experience for the shopper. Hanson was promoted at Osco, but in just a few short months, joined George’s team to help develop his ideas. The duo bought several brick and mortar businesses after additional Osco executives followed Hanson and George and helped with the idea of the new store. Since opening the first store in 1990, Dick George and Terry Hanson were successful in turning a handful of suburb boutiques into one of the largest beauty retailers in the United States (Kukec,

The quick ratio for Ulta Beauty Inc. enables the company to compare its quick assets, like cash and near-cash assets, to current liabilities (Bethel University, 2017). The quick ratio supplies companies with the information that will allow them to identify if assets can be turned to cash quick enough to cover current liabilities. Ulta has $1.10 in cash and near-cash assets for every $1 in liabilities (Ulta Beauty Inc., 2018). The debt to asset ratio is 0.39. This ratio measures the company’s leverage (Bethel University, 2017). Ulta Beauty Inc. divides its total liabilities by its total assets to determine that the company’s debt to assets ratio is 39% (Ulta Beauty Inc., 2018). This percentage shows the total assets that are paid for with borrowed money. For example: creditors, debts, and liabilities. The receivable turnover ratio is 63.20 times. Ulta Beauty Inc., on average, collects its accounts receivable over 63 times a year. However, the ratio is often converted into a daily time basis. By dividing the number of days in a year by the receivable turnover ratio, it is implied that Ulta takes an average of 5 to 6 days to collect its account receivable. This is a strong point in the company’s financial health and shows that the credit collection policies that are in place for the company are successful and operate in a quick manner to collect cash from accounts (Bethel University,