Allergan Inc. (NYSE:AGN.)

The financial data exhibits several noteworthy trends in the analyzed periods.

Return on Assets (ROA)

The ROA experienced a sharp transition from negative values in early 2011 to strong positive returns starting in the third quarter of 2011. From that point onward, the metric remained consistently above 9%, demonstrating stable asset profitability. Minor fluctuations occurred, with a slight dip towards the end of 2013, followed by a recovery leading into 2014 where the ROA peaked at approximately 12.28% in the last quarter.

Financial Leverage

Financial leverage ratios showed relative stability throughout the period. The ratio hovered near 1.6 for most quarters with minor variances between 1.57 and 1.73. An initial decrease from 1.72 to 1.59 in the first half of 2011 was observed, followed by a plateau. Towards the end of 2014, leverage remained steady around 1.6, indicating a consistent use of debt relative to equity without significant risk escalation.

Return on Equity (ROE)

The ROE mirrored the ROA trend with initial negative returns at the beginning of 2011, transitioning rapidly to elevated positive levels by the third quarter of 2011, surpassing 17%. Subsequently, ROE maintained a range roughly between 15% and 19.5%. Slight declines occurred in late 2013, followed by a rebound into 2014 reaching near 20%, reflecting efficient utilization of shareholders’ equity with strong profitability.

Overall, the data reflects an improvement from initial losses to sustained profitability from 2011 onwards, with stable financial leverage indicating controlled risk. Profitability metrics suggest effective management of assets and equity during the observed timeframe.

Net Profit Margin

The net profit margin demonstrated significant improvement starting from a negative position in the first half of 2011, moving from -0.18% to -0.05%. From the third quarter of 2011 onward, the margin showed a strong positive trend, maintaining levels between approximately 15% and 21%. There was some fluctuation within this range, but overall, the net profit margin improved steadily, peaking at 21.39% in the last quarter of 2014, indicating enhanced profitability over time.

Asset Turnover

The asset turnover ratio remained relatively stable throughout the observed period, fluctuating narrowly between 0.57 and 0.65. There was a slight decline from the mid-2011 peak of 0.65 down to the lower end of the range around 0.57 by the end of 2014. This suggests a marginal decrease in the efficiency with which the company utilized its assets to generate revenue.

Financial Leverage

Financial leverage ratios exhibited moderate fluctuations, ranging from 1.57 to 1.73. Initially, leverage decreased from 1.72 in early 2011 to approximately 1.59 during 2012, followed by an increase again near 1.7 in 2013, before a gradual decline to around 1.6 by the end of 2014. These movements indicate periods of both increased and decreased reliance on debt, with a general trend toward slightly lower leverage in the latter periods.

Return on Equity (ROE)

Return on equity mirrored the trend in net profit margin, starting from negative values early in 2011 (-0.18%) and improving significantly by the third quarter of 2011 to above 15%. ROE generally remained within a solid range of 15% to nearly 20% for most of the subsequent quarters, reflecting effective profitability relative to shareholders’ equity. The highest ROE recorded was 19.66% in the fourth quarter of 2014, indicating strong returns for equity investors by the end of the period.

Tax Burden

The tax burden ratio exhibited a significant improvement from negative values in the first two quarters of 2011 to a stable level around 0.71-0.77 in subsequent periods. This suggests an initial period of tax expense challenges or losses followed by consistent effective tax management or profitability that stabilized the ratio above 0.7 from the end of 2011 through 2014.

Interest Burden

The interest burden ratio started moderately low at around 0.63-0.65 in early 2011, then quickly increased to approximately 0.95-0.97 from late 2011 onwards. This reflects a reduction in interest expense relative to earnings before interest and taxes, indicating improved interest coverage or decreased interest costs over the observed periods.

EBIT Margin

EBIT margin showed a strong upward trend from under 5% in early 2011 to a peak exceeding 28% in several quarters of 2012 and 2014. Despite some fluctuations, the margin remained substantially higher than initial levels, which points to improved operational efficiency and profitability on earnings before interest and taxes throughout the timeframe.

Asset Turnover

Asset turnover ratio remained relatively stable but exhibited a gradual decline from approximately 0.59-0.65 in 2011 to about 0.57-0.60 by the end of 2014. This indicates a slight decrease in the efficiency of asset utilization to generate sales revenue over the periods, suggesting either growth in asset base outpacing sales increases or modest declines in sales productivity per asset unit.

Financial Leverage

Financial leverage ratios fluctuated within a narrow band ranging mostly between 1.57 and 1.73, with no clear directional trend. The company's leverage position remained steady, suggesting consistent use of debt relative to equity to finance assets over the years.

Return on Equity (ROE)

ROE saw a sharp positive shift from slightly negative values at the start of 2011 to a robust level between approximately 15% and 20% for most of the later periods. This demonstrates a notable enhancement in overall profitability and shareholder value generation, driven by improvements in operational efficiency and tax and interest burden management.

Net Profit Margin

The Net Profit Margin exhibited a significant turnaround from negative values in early 2011, starting with -0.18% in the first quarter, moving close to break-even by mid-year, and then sharply increasing to over 17% by the third quarter of 2011. This positive trend continued consistently through 2012 and 2013, maintaining levels mostly between 15% and 19%. The margin showed a marked improvement in 2014, peaking at 21.39% in the last quarter, indicating an enhanced profitability position over the four-year period.

Asset Turnover

The Asset Turnover ratio demonstrated relative stability with a mild declining trend over the evaluated timeframe. Starting at 0.59 in the first quarter of 2011, it ascended modestly to a peak of 0.65 in the second quarter of 2011, then fluctuated around 0.62 to 0.64 through 2012. In 2013 and 2014, it gradually declined, reaching 0.57 by the end of 2014. This suggests a slight reduction in the efficiency with which the company utilized its assets to generate revenue over the period.

Return on Assets (ROA)

Return on Assets followed a trajectory similar to that of the Net Profit Margin, beginning with negative or negligible values in early 2011, then advancing significantly to around 11% by the third quarter of 2011. ROA maintained a stable range between approximately 9% and 12% for the subsequent years, exhibiting a small dip in 2013 but rebounding in 2014 to reach 12.28% by year-end. This indicates consistent improvement in the company’s ability to generate profits from its asset base across the period.

Tax Burden Ratio

The tax burden ratio displayed a significant transition from negative values at the beginning of the period to consistently positive and stable ratios in later quarters. Initially, the ratio was below zero at -0.06 and -0.02, reflecting potentially unusual tax circumstances or losses. From the third quarter of 2011 onwards, the ratio stabilized around 0.70 to 0.77, indicating consistent tax expenses relative to pre-tax income, with a slight upward trend noted towards the end of 2014.

Interest Burden Ratio

The interest burden ratio showed a generally positive and improving trend over the analyzed periods. Starting from a lower range of 0.63 to 0.65 in early 2011, the ratio increased sharply to approximately 0.94-0.95 by the third quarter of 2011 and remained consistently high around 0.95 to 0.97 through the end of 2014. This suggests improved efficiency in managing interest expenses, indicating stable or reduced interest costs relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin exhibited a notable increase early in the observed time frame, jumping from approximately 4.8% in the first half of 2011 to around 25-28% from late 2011 onward. Despite some minor fluctuations, the margin remained robust and elevated throughout subsequent periods, with the highest margins consistently observed in 2012 and continuing through 2014. This indicates enhanced operating profitability and potentially effective cost management or revenue growth.

Asset Turnover Ratio

The asset turnover ratio displayed a relatively stable but slightly declining trend over the analyzed quarters. Beginning at about 0.59 to 0.65 in 2011, the ratio hovered near 0.63 to 0.64 in 2012 and gradually decreased toward 0.57 by the end of 2014. This gradual decline may suggest a reduction in asset utilization efficiency or a relative increase in asset base without commensurate revenue growth.

Return on Assets (ROA)

Return on assets followed a pattern mirroring improvements in EBIT margin and interest burden. ROA moved from marginally negative and near zero levels in early 2011 to a substantial increase, reaching double-digit percentages around 11-12% from late 2011 onwards. Although there were minor fluctuations, the ROA remained largely stable and strong across the later periods, peaking toward the end of 2014. This reflects improved overall profitability relative to the asset base, potentially driven by higher operating margins and controlled financing costs.

The analysis of the quarterly financial ratios over the examined period reveals several notable trends and patterns in the company's profitability and financial burden metrics.

Tax Burden

The tax burden ratio shows a significant improvement starting from a negative value of -0.06 in early 2011 to stabilizing around 0.72 for most of the periods from the end of 2011 through 2014. The ratio consistently remained close to 0.7 or higher in subsequent quarters, reaching its highest observed value of 0.77 by the last quarter of 2014. This progression suggests an increase in effective taxation relative to pretax income, reflecting either changes in tax policy, profitability structuring, or tax expense recognition stability.

Interest Burden

The interest burden ratio maintains a steady upward trajectory from 0.63 in the first quarter of 2011 to approximately 0.97 at the end of 2014. The early quarters show less than optimal values, but the ratio stabilizes at around 0.95 and gradually increments to 0.97, pointing to a decreasing interest expense relative to EBIT and improved management of interest costs or debt structure over time.

EBIT Margin

The EBIT margin presents a remarkable increase between the first quarter and the third quarter of 2011, jumping from roughly 4.8% to above 25%, where it remains relatively stable with minor fluctuations throughout the observed periods. Post-2011, margins fluctuate within a range of approximately 23.5% to 28.8%, generally trending upwards and peaking at 28.77% in the final quarter of 2014. This indicates improved operational efficiency and earnings before interest and taxes generation from the company's revenues.

Net Profit Margin

The net profit margin shows a significant turnaround, moving from a negative margin early in 2011 (-0.18%) to a substantial positive margin peaking at over 21% by the final quarter of 2014. After reaching positive territory in mid-2011, it stabilizes around a range of 15% to 19% through much of the subsequent quarters, before increasing steadily towards the end of 2014. This trend reflects enhanced overall profitability, likely influenced by improvements in both operational efficiency and effective management of taxes and interest expenses.

Overall, the data demonstrates a strong improvement in profitability metrics with stable and improving tax and interest burdens, indicating better financial management and operational performance during the period analyzed.