Stock Analysis on Net

Allergan Inc. (NYSE:AGN.)

This company has been moved to the archive! The financial data has not been updated since February 19, 2015.

Financial Reporting Quality: Aggregate Accruals 

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Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Allergan Inc., balance sheet computation of aggregate accruals

US$ in thousands

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Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Operating Assets
Total assets 12,415,700 10,574,300 9,179,300 8,508,600 8,308,100
Less: Cash and equivalents 4,911,400 3,046,100 2,701,800 2,406,100 1,991,200
Less: Short-term investments 55,000 603,000 260,600 179,900 749,100
Operating assets 7,449,300 6,925,200 6,216,900 5,922,600 5,567,800
Operating Liabilities
Total liabilities 4,652,700 4,104,800 3,316,700 3,176,200 3,527,000
Less: Notes payable 72,100 55,600 48,800 83,900 28,100
Less: Convertible notes 642,500
Less: Long-term debt, excluding current maturities 2,085,300 2,098,300 1,512,400 1,515,400 1,534,200
Operating liabilities 2,495,300 1,950,900 1,755,500 1,576,900 1,322,200
 
Net operating assets1 4,954,000 4,974,300 4,461,400 4,345,700 4,245,600
Balance-sheet-based aggregate accruals2 (20,300) 512,900 115,700 100,100
Financial Ratio
Balance-sheet-based accruals ratio3 -0.41% 10.87% 2.63% 2.33%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Danaher Corp.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Zoetis Inc.

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

1 2014 Calculation
Net operating assets = Operating assets – Operating liabilities
= 7,449,3002,495,300 = 4,954,000

2 2014 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2014 – Net operating assets2013
= 4,954,0004,974,300 = -20,300

3 2014 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -20,300 ÷ [(4,954,000 + 4,974,300) ÷ 2] = -0.41%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Allergan Inc. improved earnings quality from 2013 to 2014.

Cash-Flow-Statement-Based Accruals Ratio

Allergan Inc., cash flow statement computation of aggregate accruals

US$ in thousands

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Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Net earnings attributable to Allergan, Inc. 1,524,200 985,100 1,098,800 934,500 600
Less: Net cash provided by operating activities 1,927,800 1,695,400 1,599,900 1,081,900 463,900
Less: Net cash (used in) provided by investing activities 182,700 (1,375,300) (589,300) 340,800 (977,200)
Cash-flow-statement-based aggregate accruals (586,300) 665,000 88,200 (488,200) 513,900
Financial Ratio
Cash-flow-statement-based accruals ratio1 -11.81% 14.10% 2.00% -11.36%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
AbbVie Inc.
Amgen Inc.
Bristol-Myers Squibb Co.
Danaher Corp.
Eli Lilly & Co.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
Thermo Fisher Scientific Inc.
Zoetis Inc.

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

1 2014 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -586,300 ÷ [(4,954,000 + 4,974,300) ÷ 2] = -11.81%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Allergan Inc. improved earnings quality from 2013 to 2014.