Question

Power point presentation:

Company:- Ulta beauty

1). Key value drivers (related to CSF):

a). What are they? You should answer

the question what drives value for the Ulta company? Your answer might be a list of several factors such as the firm’s ability to introduce a stream of innovative new products, quality products, superior service, and so forth. These will be related to the CSF (Critical success factors). The firm’s balanced scorecard would have leading and lagging measures relating to the value drivers. These would be linkages between the value drivers and financial measures evident on the strategy map.

b). Explain how they affect sales growth and profits.

2). Balanced scorecard and strategy map (firm strategy level).

a). Create a balanced scorecard for the organization based on the information that you have researched and analyzed for the organization.

include the following:

1). stock chart: where the stock was and where it is today.

2). A very brief history of the balance sheet for 3-years (just assets, liabilities, owner’s equity), note any significant changes in either the income statement or balance sheet categories over the three years (e.g is revenue, assets, liabilities, etc growing or not and why?),

3). Copy a start chart for the last few years from Yahoo Finance or another webpage.

4). What is the dividend yield percentage (if any), what is the current stock price (has the stock gone up or down in the past few years - what is the trend?), any other significant matter you want to cite.

5). Finally - would you recommend investing in the stock and why?

please provide the stock chart and explain whether it is going up or down.

and also provide balance sheet categories over the three years (e.g is revenue, assets, liabilities, etc growing or not and why?)

please give me the answer. thank you.

please provide 3-4 slides.

I have included all the information in the question twice. what kind of information do you need more?

Ulta is a beauty brand. it's competitors are Sephora and nordstorm. ulta carries different brands of make up (means you will get every brand of makeup at one place). is this information enough?

Answer 1

Income Statement
Amnt$'000	Feb 2 2019	Feb 3 2018	Jan 28 2017
Net Sales	67,16,615	58,84,506	48,54,737
Cost of sales	43,07,304	37,87,697	31,07,508
Gross profit	24,09,311	20,96,809	17,47,229
Gross profit%	35.87%	35.63%	35.99%
Selling general & Admin	15,35,464	12,87,232	10,73,834
PreOperating Exp	19,767	24,286	18,571
Operating Income	8,54,080	7,85,291	6,54,824
Margin %	12.72%	13.35%	13.49%
Interest income	5,061	1,568	890
PBT	8,59,141	7,86,859	6,55,714
PBT %	12.79%	13.37%	13.51%
Net income	6,58,559	5,55,234	4,09,760
Net income%	9.80%	9.44%	8.44%

Amnt$	Stock Trend
Company/ Index	Feb1 2014	Jan1 2015	Jan30 2016	Jan 28 2017	Feb 3 2018	Feb 2 2019
Ulta Beauty	100	154.91	212.72	319.69	260.77	342.75
NQGS	100	113.4	113.55	138.09	182.52	179.24
RLX	100	118.75	137.22	160.31	230.59	248.01

Ulta Beauty Company – Company founded in the year 1990 as a beauty retailer and involved in mass , salon products through distinct channel + Authorised retail outlet for professional hair care products

As per US market approx 57% of shoppers and 77% of spend in the US beauty category . Company believe their strategy will give more competitive advantage which definitely string their Financial Performance . Company is largets beauty retailer in US market .

Company absolutely in growing stage in terms of net Sales , Net income and cash flow stand . Company keep on providing one kind of world class beauty assortment, lesd in store, beauty service experience transformation also reinvent digital engagement , continuous deliver operation excellence and drive efficiency

Over the long term period , companies derived growth strategy to increase in Net Sales through increase in comparable sales , opening new store and increasing omni channel capabilities

Company is confident to increase future Operating Margin with help of expand merchandise margin and leverage fixed store cost with comparable increase in sales

We have see companies Graph trend as compared with NQGS and Retail Index and noticed that Ulta beauty has crossed otjer benchmark and continuously maintain steady performance   

Complete analysis of Income statement – Good point to note that company registered good revenue growth by 14% in 2018. E commerce as well as salon service both revenue has increased . Out of that E commerce sale increased by 32% +

Major reason for increase in sales mainly due to opening of new store in 2018 = 100 Net new store . Comparable store contribute $ 461.3 Mio of teh total sales increase

Company established good growth in Gross profit Margin by 14.9% . reason for increase in gross profit mainly due to – deleverage attribute to category and channel Mix shifts , Investment in salon service + Supply chain operation partially offset by fixed store cost attributed to impact higher sales volume

Selling and Admin cost has increased in 2018 19.3% due to this little dent in Operating Margin . this is mainly due to mix of deleverage in investment in store labour to support growth and partially offset by leverage in corporate overhead

Pre Operative Epenses has increased mainly due to open up 107 new store , remodelling store 13

Interest Income increase from cash equivalent + short term investment

Due to open up new 100 ( net ) store in 2018 , companies Working capital is block in terms of inventory amount has increased a lot almost 10.8%

Excellent news is as on Feb 2019 . companies does not have any borrowing outstanding under the credit facility and company is in compliance with all terms and covenant of the Loan Agreement

Balance Sheet Position( Extract)
Amnt$'000	Feb 2 2019	Feb 3 2018
Current Asset
cash & cash Equivalent	4,09,251	2,77,445
Short term Investemnt		1,20,000
Receivable ( net)	1,36,168	99,719
Inventory( net)	12,14,329	10,96,424
Others	1,55,113	1,00,155
Total Current Asset	19,14,861	16,93,743
Total Asset	31,91,172	29,08,687
Current Liability
Account Payable	4,04,016	3,25,758
Others	4,19,720	3,16,408
Total Current Liability	8,23,736	6,42,166

As already highlighted that major blockage in current liability mainly due to Inventory high balance ( already explained above) along with increase in receivable Balance . Company other side not release creditors payment . Good point is that company complete move out from Short term investment of $ 120 Mio and increase in cash balance .

Companies cash flow statement showing that :

From investment activity :

Company keep on purchase and sale of Short term Investment on YOY basis . Company also keep on Investing money relates to capex with opening new store which will definitely help company to growth faster in future

From financial Activity of cash flow – Excellent point to note that company not at all depended on any long term liability and due to this company Net interest always positive side . Company YOY basis , earn Interest Income at higher rate .

Company investes good amount of money relates to “ repurchase of Common shares” which will definitely help company to grow in future and strengthen equity capital

Good to note that company increase closing cash and cash equivalent YOY basis

2018 – $ 409 Mio

2017 –$ 277 Mio

2016- $ 385 Mio

Couple of good and excellent growth point of the company :

1) increase store productivity

2) Driving digital innovation

3) Optimizing Salon Service

4) Evolution world class Loyalty Program

5) tremendous support growth with help of supply chain

6) Sustain strong financial