Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Allergan Inc., liquidity ratios (quarterly data)
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
The analysis of the liquidity ratios over the reported periods indicates a generally strong and stable financial position, with some fluctuations that suggest changes in the company’s management of current assets relative to current liabilities.
- Current Ratio
- The current ratio consistently remained above 2.7 across all quarters, peaking at 4.42 in June 2012. This upward trend from early 2011 through mid-2012 suggests an improvement in the ability to cover short-term obligations with current assets. Following this peak, the ratio experienced a slight decline through early 2013 but rebounded again to reach values above 4 in subsequent quarters, indicating sustained strong liquidity.
- Quick Ratio
- This ratio, which excludes inventories from current assets, shows a pattern similar to the current ratio but with generally lower values, reflecting the liquid assets' ability to cover current liabilities without relying on inventory. It improved steadily from 2.34 in March 2011 to a high of 3.67 in June 2012, then hovered between 2.95 and 3.69, maintaining a strong liquidity position. Its stability after mid-2012 suggests effective cash and receivables management.
- Cash Ratio
- The cash ratio, representing the most conservative measure of liquidity by considering only cash and cash equivalents, generally increased from 1.88 in March 2011 to a peak of 2.93 in December 2013. This upward trend indicates a strengthening cash position over the periods analyzed. A slight decline was seen in mid-2014 but was followed by an increase to 3.19 in the last reported quarter, underscoring improved cash reserves relative to current liabilities.
Overall, the liquidity measures reveal a company with strong capability to meet short-term obligations through various levels of asset liquidity. The peaks in 2012 suggest a period of especially prudent liquidity management, with a slight moderation in subsequent periods but maintained stability. The general upward trend in cash reserves over the four-year span reflects a conservative financial strategy or improved operational cash flows enhancing the company’s short-term financial resilience.
Current Ratio
Allergan Inc., current ratio calculation (quarterly data)
| Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Current assets | 6,871,200) | 6,103,800) | 5,702,900) | 5,458,700) | 5,319,700) | 4,932,400) | 4,482,200) | 4,069,500) | 4,458,800) | 4,535,800) | 4,259,600) | 4,238,600) | 4,048,300) | 3,682,600) | 3,592,600) | 4,084,400) | |||||
| Current liabilities | 1,557,300) | 1,567,000) | 1,406,400) | 1,248,100) | 1,244,300) | 1,199,700) | 1,097,900) | 1,061,500) | 1,095,200) | 1,054,900) | 963,800) | 968,800) | 955,000) | 923,700) | 921,500) | 1,475,600) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Current ratio1 | 4.41 | 3.90 | 4.05 | 4.37 | 4.28 | 4.11 | 4.08 | 3.83 | 4.07 | 4.30 | 4.42 | 4.38 | 4.24 | 3.99 | 3.90 | 2.77 | |||||
| Benchmarks | |||||||||||||||||||||
| Current 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. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q4 2014 Calculation
Current ratio = Current assets ÷ Current liabilities
= 6,871,200 ÷ 1,557,300 = 4.41
2 Click competitor name to see calculations.
The financial data reveals several key trends regarding the company's liquidity position over the examined periods. Current assets demonstrated some fluctuations during the initial quarters but showed a clear upward trend beginning in the first quarter of 2013, with a notable increase reaching its peak in the last quarter of 2014. This continuous growth in current assets suggests an improvement in the company’s short-term asset base.
Current liabilities exhibited variability but generally trended upward, particularly from early 2013 onwards. Although there were some quarterly declines, the overall increase in current liabilities reflects a rise in the company’s short-term obligations over time.
The current ratio, which measures liquidity by comparing current assets to current liabilities, exhibited variations but remained consistently above 3.7 throughout the observed periods. The ratio peaked around the first half of 2012, indicating very strong liquidity at that time. While there was a slight decrease in the current ratio during parts of 2013 and 2014, it consistently stayed above 3.8, suggesting a comfortable margin of safety in meeting short-term liabilities. The increase in the final quarter of 2014 denotes an enhanced liquidity position relative to earlier quarters.
- Current Assets
- Showed growth over time, especially from early 2013 forward, culminating in a substantial increase by the end of 2014.
- Current Liabilities
- Experienced upward movement in later periods, reflecting increased short-term financial commitments.
- Current Ratio
- Remained consistently strong above 3.7, indicating robust liquidity with some fluctuations but an overall stable ability to cover short-term obligations.
In summary, the company maintained a strong liquidity position throughout the periods analyzed, with growing current assets and manageable increases in current liabilities. The current ratio's stability above 3.8 further highlights the firm’s effective management of short-term financial health.
Quick Ratio
Allergan Inc., quick ratio calculation (quarterly data)
| Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Cash and equivalents | 4,911,400) | 3,910,800) | 3,189,900) | 2,815,300) | 3,046,100) | 2,686,300) | 2,484,000) | 2,198,800) | 2,701,800) | 2,655,000) | 2,368,700) | 2,291,700) | 2,406,100) | 2,212,000) | 1,856,500) | 2,530,800) | |||||
| Short-term investments | 55,000) | 274,600) | 525,600) | 802,000) | 603,000) | 524,600) | 184,800) | 50,000) | 260,600) | 279,900) | 304,800) | 349,800) | 179,900) | 66,500) | 299,800) | 249,700) | |||||
| Trade receivables, net | 914,500) | 967,400) | 1,055,000) | 990,400) | 883,300) | 908,200) | 917,200) | 887,900) | 764,200) | 872,600) | 867,900) | 855,700) | 730,600) | 710,900) | 744,200) | 671,600) | |||||
| Total quick assets | 5,880,900) | 5,152,800) | 4,770,500) | 4,607,700) | 4,532,400) | 4,119,100) | 3,586,000) | 3,136,700) | 3,726,600) | 3,807,500) | 3,541,400) | 3,497,200) | 3,316,600) | 2,989,400) | 2,900,500) | 3,452,100) | |||||
| Current liabilities | 1,557,300) | 1,567,000) | 1,406,400) | 1,248,100) | 1,244,300) | 1,199,700) | 1,097,900) | 1,061,500) | 1,095,200) | 1,054,900) | 963,800) | 968,800) | 955,000) | 923,700) | 921,500) | 1,475,600) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Quick ratio1 | 3.78 | 3.29 | 3.39 | 3.69 | 3.64 | 3.43 | 3.27 | 2.95 | 3.40 | 3.61 | 3.67 | 3.61 | 3.47 | 3.24 | 3.15 | 2.34 | |||||
| Benchmarks | |||||||||||||||||||||
| Quick 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. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q4 2014 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 5,880,900 ÷ 1,557,300 = 3.78
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals discernible trends in liquidity and short-term financial health over the observed periods. The focus on total quick assets, current liabilities, and the resulting quick ratio highlights the company's capacity to cover immediate liabilities without relying on inventory sales.
- Total Quick Assets
- Throughout the period from March 2011 to December 2014, total quick assets have demonstrated a generally positive trajectory, increasing from approximately 3.45 billion USD to nearly 5.88 billion USD. There are signs of fluctuations, with decreases noted in some quarters such as June 2011 and March 2013; however, the overall trend is upward, indicating growth in liquid assets available to the company.
- Current Liabilities
- Current liabilities show a less consistent pattern. Starting at roughly 1.48 billion USD in March 2011, the figure decreased sharply by June 2011, falling to approximately 922 million USD, then remained relatively stable through 2011 and 2012 with minor increases. From 2013 onwards, there is a clear upward trend reaching about 1.56 billion USD by September 2014, suggesting a gradual increase in short-term obligations.
- Quick Ratio
- The quick ratio, indicating the company's ability to meet short-term obligations with its most liquid assets, displayed a rising trend from the first quarter of 2011 (2.34) through late 2011 and early 2012, peaking around 3.67 in mid-2012. Thereafter, it fluctuated between 3.29 and 3.78 in subsequent quarters. Notably, the ratio dropped below 3.0 in early 2013 but recovered in ensuing quarters, peaking again at 3.78 by the end of 2014. This pattern indicates a generally strong liquidity position, albeit with periods of relative weakening.
In summary, the company’s liquidity position, as measured by the quick ratio and supported by total quick assets, has improved notably over the analyzed timeframe. While current liabilities increased over the longer term, this was offset by a more significant rise in quick assets, supporting an overall enhancement in the company’s immediate financial flexibility and ability to cover short-term debts without dependence on inventory liquidation. The persistent fluctuations in the quick ratio suggest ongoing management of working capital and liquidity but confirm a robust capability to meet short-term liabilities.
Cash Ratio
Allergan Inc., cash ratio calculation (quarterly data)
| Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Cash and equivalents | 4,911,400) | 3,910,800) | 3,189,900) | 2,815,300) | 3,046,100) | 2,686,300) | 2,484,000) | 2,198,800) | 2,701,800) | 2,655,000) | 2,368,700) | 2,291,700) | 2,406,100) | 2,212,000) | 1,856,500) | 2,530,800) | |||||
| Short-term investments | 55,000) | 274,600) | 525,600) | 802,000) | 603,000) | 524,600) | 184,800) | 50,000) | 260,600) | 279,900) | 304,800) | 349,800) | 179,900) | 66,500) | 299,800) | 249,700) | |||||
| Total cash assets | 4,966,400) | 4,185,400) | 3,715,500) | 3,617,300) | 3,649,100) | 3,210,900) | 2,668,800) | 2,248,800) | 2,962,400) | 2,934,900) | 2,673,500) | 2,641,500) | 2,586,000) | 2,278,500) | 2,156,300) | 2,780,500) | |||||
| Current liabilities | 1,557,300) | 1,567,000) | 1,406,400) | 1,248,100) | 1,244,300) | 1,199,700) | 1,097,900) | 1,061,500) | 1,095,200) | 1,054,900) | 963,800) | 968,800) | 955,000) | 923,700) | 921,500) | 1,475,600) | |||||
| Liquidity Ratio | |||||||||||||||||||||
| Cash ratio1 | 3.19 | 2.67 | 2.64 | 2.90 | 2.93 | 2.68 | 2.43 | 2.12 | 2.70 | 2.78 | 2.77 | 2.73 | 2.71 | 2.47 | 2.34 | 1.88 | |||||
| Benchmarks | |||||||||||||||||||||
| Cash 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. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q4 2014 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 4,966,400 ÷ 1,557,300 = 3.19
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's liquidity position and short-term obligations over the examined periods.
- Total cash assets
- Total cash assets exhibit fluctuations but show an overall growth trend from March 2011 through December 2014. Starting around $2.78 billion, cash assets declined to approximately $2.16 billion by mid-2011, followed by a recovery and increase peaking beyond $4.96 billion by the end of 2014. This upward trajectory suggests strategic accumulation or improved cash generation capabilities over the observed timeframe.
- Current liabilities
- Current liabilities generally increase over the period from about $1.48 billion in early 2011 to approximately $1.56 billion at the end of 2014, with some minor fluctuations. Notably, liabilities decreased sharply from the first to the second quarter of 2011, after which they rose gradually, reaching the highest levels in mid to late 2014. The steady rise in current liabilities indicates increasing short-term payables or obligations.
- Cash ratio
- The cash ratio fluctuates but remains consistently robust, generally staying above 2.0 across all quarters. It rises significantly from 1.88 in the first quarter of 2011 to a peak of 3.19 in the last quarter of 2014. This upward movement in the cash ratio implies an increasingly strong liquidity position, with cash and equivalents more than covering current liabilities multiple times over. Despite some minor dips, the overall trend reflects conservative liquidity management or improved cash reserves relative to short-term liabilities.
Overall, the data illustrates an improving liquidity profile with increasing cash reserves and a stable-to-increasing level of current liabilities. The cash coverage of liabilities remains high, indicating that the company has maintained a healthy buffer to meet short-term obligations throughout the analyzed periods. The substantial growth in cash assets towards 2014 may reflect operational cash flow improvements, asset sales, financing activities, or a strategic decision to hold more liquid assets.