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Fair Value
 12 Months Ended
Jan. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value

5. Fair Value

The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach that relate to its financial assets and financial liabilities). The levels of the hierarchy are described as follows:

 

•

Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

 

•

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

 

•

Level 3: Unobservable inputs that reflect the Company’s own assumptions.

Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy. The Company’s financial assets that are accounted for at fair value on a recurring basis are presented in the tables below:

 

 

 

Marketable Securities Fair Value as of

January 31, 2019

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

261,333

 

 

$

—

 

 

$

—

 

 

$

261,333

 

Municipal and pre-refunded municipal bonds

 

 

—

 

 

 

51,232

 

 

 

—

 

 

 

51,232

 

Federal government agencies

 

 

8,062

 

 

 

—

 

 

 

—

 

 

 

8,062

 

Mutual funds, held in rabbi trust

 

 

6,751

 

 

 

—

 

 

 

—

 

 

 

6,751

 

Certificates of deposit

 

 

—

 

 

 

3,193

 

 

 

—

 

 

 

3,193

 

Commercial paper

 

 

 

 

 

 

2,979

 

 

 

—

 

 

 

2,979

 

Treasury bills

 

 

2,974

 

 

 

—

 

 

 

—

 

 

 

2,974

 

 

 

$

279,120

 

 

$

57,404

 

 

$

—

 

 

$

336,524

 

 

 

 

Marketable Securities Fair Value as of

January 31, 2018

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

151,053

 

 

$

—

 

 

$

—

 

 

$

151,053

 

Municipal and pre-refunded municipal bonds

 

 

—

 

 

 

62,303

 

 

 

—

 

 

 

62,303

 

Mutual funds, held in rabbi trust

 

 

6,237

 

 

 

—

 

 

 

—

 

 

 

6,237

 

Certificates of deposit

 

 

—

 

 

 

4,220

 

 

 

—

 

 

 

4,220

 

 

 

$

157,290

 

 

$

66,523

 

 

$

—

 

 

$

223,813

 

 

Financial assets

Level 1 assets consist of financial instruments whose value has been based on inputs that use, as their basis, readily observable market data that are actively quoted and are validated through external sources, including third-party pricing services and brokers.

Level 2 assets consist of financial instruments whose value has been based on quoted prices for similar assets and liabilities in active markets as well as quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3 assets consist of financial instruments where there has been no active market. The Company held no Level 3 financial instruments as of January 31, 2019 and January 31, 2018.

The fair value of cash and cash equivalents (Level 1) approximates carrying value since cash and cash equivalents consist of short-term highly liquid investments with maturities of less than three months at the time of purchase. As of January 31, 2019 and 2018, cash and cash equivalents included cash on hand, cash in banks, money market accounts and marketable securities with maturities of less than three months at the time of purchase. The fair value of debt approximates its carrying value as it is all variable rate debt.

Non-financial assets

The Company’s non-financial assets, primarily consisting of property and equipment and goodwill, are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable and, in the case of goodwill, an annual assessment is performed.

The fair value of property and equipment was determined using a discounted cash-flow model that utilized Level 3 inputs. The Company’s retail locations are reviewed for impairment at the retail location level, which is the lowest level at which individual cash flows can be identified. In calculating future cash flows, the Company makes estimates regarding future operating results based on its experience and knowledge of market factors in which the retail location is located. Goodwill has been assigned to reporting units for purposes of impairment testing. The Company evaluates goodwill to determine if the carrying value exceeds the fair value of the reporting unit. During fiscal 2019, 2018 and 2017, the Company determined that certain long-lived assets at the Company’s retail locations were unable to recover their carrying value. These assets were written down to a fair value resulting in impairment charges of $3,544, $11,410 and $4,341 in fiscal 2019, 2018 and 2017, respectively.