How to factory reset Ubuntu

If you boot to root recovery mode and delete all hidden folders in your user's home folder except .Xsession .bashrc or .iceauthority then the settings for the desktop and applications will be reset. You can also do this in live CD if you prefer a GUI

What do you want to "factory reset"?

You have to distinguish to parts:
1. The software that is installed
2. Your personal settings and files

When you install an Ubuntu system and then use the package management tools to update the packages or to install additional software, then you have already changed your system that it differs from the original installation that you had. There is no procedure to undo all package updates except by doing a complete new installation from scratch. But I would not see any reason that someone wants to reset the packages to the (meanwhile outdated) state that they were at the moment of initial installation.

When you just want to remove the personal data and personal setting that you have created, then removing the contents of your home directory as described by actionparsnip should be the right action. Of course you have to take into account that you may have created personal files also in other directories. If you have done that, you have to remove these, too.

Shawn Bartel suggests this article as an answer to your question:
FAQ #356: “How do I reset my password in Ubuntu ?”.