Allergan Inc. (NYSE:AGN.)

Return on Assets (ROA)

The Return on Assets exhibited a significant increase from a negligible 0.01% in 2010 to double-digit values thereafter. Notably, ROA rose to 10.98% in 2011 and continued to improve slightly to 11.97% in 2012. Although there was a moderate decline to 9.32% in 2013, the metric rebounded to reach its highest point at 12.28% in 2014. This trend indicates an overall enhancement in the efficiency of asset utilization over the observed period, with a brief dip in 2013.

Financial Leverage

The financial leverage ratio demonstrated a relatively stable pattern with minor fluctuations. Starting at 1.75 in 2010, it decreased to 1.6 in 2011 and showed a slight further reduction to 1.57 in 2012. There was a modest increase to 1.64 in 2013, followed by a return to 1.6 in 2014. This stability suggests consistent use of debt relative to equity, without significant increases or reductions in leverage risk during these years.

Return on Equity (ROE)

Return on Equity followed a trend that mirrors the patterns observed in ROA, beginning at a minimal 0.01% in 2010 and escalating to 17.6% in 2011. It continued to increase to 18.82% in 2012 before declining to 15.24% in 2013. By 2014, ROE had reached 19.66%, the highest level within the period. This trajectory reflects an overall improvement in profitability relative to shareholders' equity, notwithstanding a temporary reduction in 2013.

The financial data presents a comprehensive overview of key performance indicators over a five-year period. The analysis highlights trends in profitability, efficiency, leverage, and overall return to equity holders.

Net Profit Margin

The net profit margin exhibited substantial improvement from 0.01% in 2010 to a peak of 21.39% in 2014. Notably, the margin increased sharply between 2010 and 2011, reaching 17.48%, then continued to rise moderately to 19.25% in 2012. There was a slight decline to 15.9% in 2013, followed by a rebound to the highest level in the final year under review. This trend suggests enhanced profitability and effective cost management over the period.

Asset Turnover

Asset turnover ratios remained relatively stable but show a slight downward trend, starting at 0.58 in 2010 and declining to 0.57 by 2014. The ratio peaked at 0.63 in 2011 and then gradually decreased each year. This indicates a minor reduction in the efficiency of asset utilization to generate sales or revenue over the period.

Financial Leverage

Financial leverage decreased from 1.75 in 2010 to 1.6 in 2014, with a slight fluctuation during the intervening years. The lowest leverage was observed at 1.57 in 2012, while it rose temporarily to 1.64 in 2013 before declining again. This pattern suggests a modest reduction in reliance on debt or external financing in relation to equity, implying a potentially more conservative capital structure.

Return on Equity (ROE)

ROE closely follows the trend of net profit margin, starting virtually at zero in 2010, then significantly increasing to 17.6% in 2011, and continuing to rise to 18.82% in 2012. It dipped to 15.24% in 2013, before increasing again to 19.66% in 2014. This demonstrates strong overall profitability and efficient use of shareholders' equity, despite some variability during the middle years.

In summary, the financial indicators reveal a company that has markedly improved profitability and returns to equity holders over the five-year span, while maintaining relatively stable asset efficiency and progressively adopting a slightly more conservative leverage position. The positive net profit margin and ROE trends are the most notable, suggesting a strengthening financial performance.

The financial data over the five-year period reveals several noteworthy trends in profitability, efficiency, and leverage.

Tax Burden

The tax burden ratio, initially absent in 2010, stabilized around 0.72 during 2011 and 2012, decreased slightly to 0.68 in 2013, and then increased to 0.77 in 2014. This indicates fluctuations in the effective tax rate with a slight increase in tax impact on earnings by the end of the period.

Interest Burden

This ratio showed a strong improvement from 0.68 in 2010 to consistently high levels close to 0.95-0.97 in the following years. The upward trend reflects a reduction in interest expenses relative to earnings before interest and taxes, suggesting improved management of interest costs or reduced debt servicing expenses.

EBIT Margin

The EBIT margin experienced substantial growth from a low 5.09% in 2010 to a peak of 28.77% in 2014. Despite some variability in the interim years, this trend reflects enhanced operational efficiency and improved profitability at the earnings before interest and taxes level.

Asset Turnover

The asset turnover ratio increased from 0.58 in 2010 to a peak of 0.63 in 2011, then gradually declined to 0.57 in 2014. This suggests a slight decrease in the efficiency with which the company uses its assets to generate sales over the latter part of the period.

Financial Leverage

The company’s financial leverage ratio started at 1.75 in 2010 and showed a general downward trend, reaching 1.6 by 2014. This moderate decline indicates a decrease in the use of debt or other liabilities relative to equity, implying a potentially more conservative capital structure over time.

Return on Equity (ROE)

ROE followed a strong upward trajectory from near zero (0.01%) in 2010 to 19.66% in 2014, with a slight dip in 2013. This improvement reflects the combined effect of higher profitability margins, stable asset utilization, and modest leverage levels, resulting in enhanced shareholder returns.

Overall, the data indicates significant improvements in operational profitability and earnings quality. While asset efficiency saw a minor decline, the reduction in financial leverage coupled with higher EBIT margins contributed to substantial growth in return on equity. The company appears to have effectively controlled interest expenses and maintained a manageable tax burden, supporting improved financial performance during this period.

The financial metrics of the analyzed entity demonstrate notable trends over the five-year period ending December 31, 2014. Key profitability and efficiency indicators such as Net Profit Margin, Asset Turnover, and Return on Assets (ROA) were evaluated to assess performance dynamics.

Net Profit Margin

This metric shows a significant improvement from a negligible level of 0.01% in 2010 to a high above 21% in 2014. After a substantial increase to 17.48% in 2011, the margin saw a peak in 2012 at 19.25%, a decline to 15.9% in 2013, followed by a rebound to the highest value recorded for the period in 2014. The overall trend points to enhanced profitability, despite moderate fluctuations.

Asset Turnover

The asset turnover ratio illustrates a slight decrease over time, starting at 0.58 in 2010, rising marginally to 0.63 in 2011, then gradually declining to 0.57 by 2014. This pattern suggests a modest reduction in the efficiency with which assets generate sales over the period, indicating potential challenges in asset utilization or changes in asset structure.

Return on Assets (ROA)

ROA experienced a notable increase from 0.01% in 2010 to 12.28% in 2014, reflecting improved overall profitability relative to asset base. After rising to 10.98% in 2011 and further to 11.97% in 2012, ROA decreased to 9.32% in 2013, then recovered strongly in 2014. The trend aligns with the fluctuations observed in the Net Profit Margin, reinforcing the view of improved earnings efficiency despite some variability.

In summary, profitability indicators show a strong upward trend with some intermediate volatility, while asset turnover experienced a slight decline. The combined analysis indicates the entity managed to enhance profitability and return on assets, albeit with a somewhat reduced efficiency in asset utilization, which could merit further examination in operational or investment strategies.

Tax Burden

The tax burden ratio starts at 0 in 2010 and then stabilizes from 2011 onward, fluctuating slightly between 0.68 and 0.77. This indicates a recovery from an unusual or unreported tax scenario in 2010, followed by a relatively steady tax impact on earnings over the subsequent years.

Interest Burden

The interest burden ratio shows a marked improvement from 0.68 in 2010 to consistently high levels near 0.95–0.97 in the following years. This trend suggests enhanced management of interest expenses relative to earnings before interest and taxes, resulting in less income consumed by interest costs.

EBIT Margin

The EBIT margin experiences significant growth from a modest 5.09% in 2010 to a peak of 28.77% in 2014, with a slight dip in 2013. This upward trend reflects improved operational efficiency and profitability, with the company generating more earnings from its revenues over time.

Asset Turnover

Asset turnover fluctuates narrowly, starting at 0.58 in 2010, peaking at 0.63 in 2011, and then gradually declining to 0.57 by 2014. This indicates a mild decrease in how effectively the company utilizes its assets to generate revenue after 2011, although the range remains relatively stable overall.

Return on Assets (ROA)

Return on assets exhibits a sharp increase from virtually zero in 2010 to above 10% in subsequent years, peaking at 12.28% in 2014 despite a dip to 9.32% in 2013. This suggests that the company significantly improved its ability to generate net income from its asset base over the period.

Tax Burden

The tax burden ratio exhibits an initial value of zero in 2010, followed by a stable period from 2011 to 2014 where it ranges between 0.68 and 0.77. After 2010, the ratio maintains a level above 0.68, reaching its highest point of 0.77 in 2014, indicating a relatively consistent tax impact on pre-tax income during the latter years.

Interest Burden

The interest burden ratio shows a significant increase from 0.68 in 2010 to a high stable range between 0.95 and 0.97 from 2011 through 2014. This suggests an improvement in controlling interest expenses relative to EBIT, with only minor fluctuations indicating consistent interest cost management post-2010.

EBIT Margin

The EBIT margin experienced a substantial increase from 5.09% in 2010 to a peak of 28.77% in 2014. After the sharp rise observed between 2010 and 2011 (from 5.09% to 25.58%), the margin continued to improve moderately, with a slight dip in 2013 to 24.5%, before reaching its highest level in 2014. This trend reflects improving operational profitability over the period.

Net Profit Margin

The net profit margin mirrors the trend seen in EBIT margin, starting almost neutral at 0.01% in 2010 and elevating sharply to 17.48% in 2011. The margin further increased to 19.25% in 2012, declined to 15.9% in 2013, and then rose again to 21.39% in 2014. This trajectory indicates fluctuating but overall positive net profitability, with some variability likely influenced by factors beyond operating income such as taxes, interest, or other expenses.