Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Allergan PLC, liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
- Current Ratio
- The current ratio exhibits significant fluctuations over the observed periods. Initially, it remained steady around 0.99 for the first two quarters in 2016, followed by a sharp increase to 3.95 in September 2016 and a subsequent decline to approximately 1.16 by the end of 2017. In 2018, the ratio hovered near or just below 1, with a notable dip to 0.71 in the first quarter of 2019. Thereafter, it recovered to slightly above 1, maintaining around 1.00 to 1.03 up to the first quarter of 2020. Overall, the current ratio suggests periods of increased short-term liquidity followed by stabilization near a level indicative of balanced current assets and liabilities.
- Quick Ratio
- The quick ratio follows a pattern similar to the current ratio but at consistently lower levels, reflecting a more conservative measure of liquidity excluding inventory. It begins very low at 0.48 in March 2016 and drops to 0.34 the following quarter. A sharp spike occurs in September 2016 to 3.71, then a gradual decrease to around 0.95 by the end of 2017. Throughout 2018 and 2019, values fluctuate between 0.51 and 0.83, with a slight upward trend towards 0.79 by the end of 2019 and settling at 0.73 in early 2020. These figures indicate that liquid assets without inventory are generally less than current liabilities, but with interim periods of strong liquidity.
- Cash Ratio
- The cash ratio presents the most conservative liquidity measure, focusing solely on cash and cash equivalents. It exhibits notable volatility, beginning at 0.22 in early 2016, declining sharply to 0.06 in the second quarter, then surging to 3.41 in September 2016. Following this peak, it decreases steadily to approximately 0.65 by the end of 2017. During 2018 and 2019, the ratio remains below 0.5 for most quarters but shows an upward tendency, reaching 0.53 at year-end 2019 before falling back to 0.35 in the first quarter of 2020. This pattern implies variable levels of immediate liquidity, with occasional periods of strong cash holdings but mostly moderate cash availability relative to current liabilities.
Current Ratio
Allergan PLC, current ratio calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current assets | 7,474,100) | 11,126,700) | 9,593,600) | 8,572,800) | 6,289,300) | 6,475,400) | 5,740,200) | 6,103,700) | 6,393,300) | 11,376,700) | 10,112,800) | 10,433,200) | 13,700,700) | 17,857,900) | 31,723,900) | 8,755,200) | 10,091,500) | ||||||
| Current liabilities | 7,433,400) | 11,070,700) | 9,638,700) | 8,303,700) | 8,849,200) | 5,727,900) | 6,231,900) | 6,125,300) | 5,816,000) | 9,848,100) | 8,559,800) | 8,638,300) | 10,391,600) | 7,874,700) | 8,025,500) | 8,867,400) | 10,195,500) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Current ratio1 | 1.01 | 1.01 | 1.00 | 1.03 | 0.71 | 1.13 | 0.92 | 1.00 | 1.10 | 1.16 | 1.18 | 1.21 | 1.32 | 2.27 | 3.95 | 0.99 | 0.99 | ||||||
| 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-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Current ratio = Current assets ÷ Current liabilities
= 7,474,100 ÷ 7,433,400 = 1.01
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibit significant volatility throughout the periods analyzed. Initial values start relatively high but then decline sharply by mid-2016. A substantial spike is observed at the end of September 2016, followed by a gradual decrease through early 2018. Starting from mid-2019, there is a noticeable upward trend reaching a peak in the fourth quarter of 2019 before a subsequent decline again by the first quarter of 2020.
- Current Liabilities
- Current liabilities demonstrate a generally decreasing trend from early 2016 to early 2017, with a brief increase towards the end of 2016. From the first quarter of 2018, liabilities tend to fluctuate within a narrower range but show a marked increase in the last quarter of 2019 and slight reduction by early 2020. The pattern indicates variability but less pronounced swings compared to current assets.
- Current Ratio
- The current ratio reflects the changes in current assets relative to current liabilities, starting just below 1.0 and remaining stable around this level for the first half of 2016. A peak occurs in late 2016 coinciding with the spike in current assets, indicating strong short-term liquidity at that time. Subsequently, the ratio generally declines through 2017 and 2018, dropping below 1.0 at the beginning of 2019, which could indicate potential liquidity constraints. The ratio recovers towards and slightly above 1.0 from mid-2019 to early 2020, suggesting improved but still moderate short-term financial health.
- Overall Assessment
- The periods under review reveal considerable fluctuations in liquidity indicators. The notable spike in current assets in late 2016 and the related increase in the current ratio suggest an isolated improvement in liquidity at that time. However, the subsequent decline of the current ratio below 1.0 in early 2019 may point to periods of tighter liquidity. Recent trends indicate a mild recovery in liquidity but highlight the need for ongoing monitoring of short-term solvency given the persistent variations in both current assets and liabilities.
Quick Ratio
Allergan PLC, quick ratio calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Cash and cash equivalents | 999,500) | 2,503,300) | 1,237,500) | 1,651,400) | 788,500) | 880,400) | 1,187,900) | 1,674,700) | 994,800) | 1,817,200) | 1,612,700) | 886,900) | 1,092,900) | 1,724,000) | 7,554,700) | 489,500) | 2,260,800) | ||||||
| Marketable securities | 1,618,800) | 3,411,600) | 3,318,400) | 322,300) | 995,200) | 1,026,900) | 22,000) | 21,500) | 1,037,400) | 4,632,100) | 3,829,100) | 4,939,000) | 7,858,200) | 11,501,500) | 19,837,600) | 17,100) | 13,000) | ||||||
| Accounts receivable, net of allowances for doubtful accounts and credit losses | 2,800,600) | 3,192,300) | 3,012,300) | 3,086,300) | 2,731,200) | 2,868,100) | 2,826,900) | 2,760,800) | 2,639,200) | 2,899,000) | 2,808,600) | 2,795,900) | 2,542,000) | 2,531,000) | 2,398,500) | 2,490,500) | 2,652,800) | ||||||
| Total quick assets | 5,418,900) | 9,107,200) | 7,568,200) | 5,060,000) | 4,514,900) | 4,775,400) | 4,036,800) | 4,457,000) | 4,671,400) | 9,348,300) | 8,250,400) | 8,621,800) | 11,493,100) | 15,756,500) | 29,790,800) | 2,997,100) | 4,926,600) | ||||||
| Current liabilities | 7,433,400) | 11,070,700) | 9,638,700) | 8,303,700) | 8,849,200) | 5,727,900) | 6,231,900) | 6,125,300) | 5,816,000) | 9,848,100) | 8,559,800) | 8,638,300) | 10,391,600) | 7,874,700) | 8,025,500) | 8,867,400) | 10,195,500) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Quick ratio1 | 0.73 | 0.82 | 0.79 | 0.61 | 0.51 | 0.83 | 0.65 | 0.73 | 0.80 | 0.95 | 0.96 | 1.00 | 1.11 | 2.00 | 3.71 | 0.34 | 0.48 | ||||||
| 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-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 5,418,900 ÷ 7,433,400 = 0.73
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibit considerable volatility over the observed periods. Initially, there is a sharp increase from approximately 2.99 billion to nearly 29.79 billion by the end of September 2016, followed by a decline to around 15.76 billion by the end of December 2016. Subsequently, the quick assets fluctuate between roughly 8.25 billion and 11.5 billion throughout 2017, before declining to values between 4.03 billion and 4.77 billion during 2018. Entering 2019 and early 2020, there is a gradual upward trend, reaching a peak of about 9.11 billion by December 2019, then decreasing again to approximately 5.42 billion at the end of the first quarter of 2020.
- Current Liabilities
- Current liabilities show a general pattern of decline from 10.20 billion in March 2016 to about 7.88 billion by the end of 2016. In 2017, liabilities remain mostly stable, fluctuating slightly around 8.55 billion to 10.39 billion. However, starting in 2018, there is a marked reduction, dropping to a range approximately between 5.72 billion and 6.23 billion. During 2019, liabilities rise once again, peaking at around 11.07 billion by the end of 2019, followed by a notable decrease to 7.43 billion by March 2020.
- Quick Ratio
- The quick ratio indicates significant fluctuations indicative of liquidity changes. Early 2016 figures reveal low ratios under 0.5, with a substantial spike in the third quarter of 2016 reaching 3.71, reflecting an unusually high liquidity position during that quarter. However, it declines sharply the following quarter to 2.00 and continues to decrease through 2017, remaining close to or just below 1.00. Throughout 2018, the ratio oscillates between 0.65 and 0.83, suggesting relatively lower liquidity. In 2019, there is a downward trend reaching lows near 0.51 before improving slightly to 0.82 by the end of the year. The first quarter of 2020 sees a decrease again to approximately 0.73.
- Overall Analysis
- The data reveals a pattern of volatility and cyclical fluctuations in liquidity-related metrics. The dramatic spikes and drops in total quick assets and the quick ratio suggest periods of exceptional liquidity, possibly influenced by specific financial events or seasonal factors. Current liabilities also fluctuate but within a narrower range, with a noticeable rise towards the end of 2019 before declining in early 2020. Overall, liquidity appeared to be strongest in late 2016 and late 2019, while other periods, especially parts of 2017 and 2018, reflect reduced liquidity positions. The trends suggest a need for careful monitoring of working capital management and possibly indicate periods of financial restructuring or asset adjustments.
Cash Ratio
Allergan PLC, cash ratio calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Cash and cash equivalents | 999,500) | 2,503,300) | 1,237,500) | 1,651,400) | 788,500) | 880,400) | 1,187,900) | 1,674,700) | 994,800) | 1,817,200) | 1,612,700) | 886,900) | 1,092,900) | 1,724,000) | 7,554,700) | 489,500) | 2,260,800) | ||||||
| Marketable securities | 1,618,800) | 3,411,600) | 3,318,400) | 322,300) | 995,200) | 1,026,900) | 22,000) | 21,500) | 1,037,400) | 4,632,100) | 3,829,100) | 4,939,000) | 7,858,200) | 11,501,500) | 19,837,600) | 17,100) | 13,000) | ||||||
| Total cash assets | 2,618,300) | 5,914,900) | 4,555,900) | 1,973,700) | 1,783,700) | 1,907,300) | 1,209,900) | 1,696,200) | 2,032,200) | 6,449,300) | 5,441,800) | 5,825,900) | 8,951,100) | 13,225,500) | 27,392,300) | 506,600) | 2,273,800) | ||||||
| Current liabilities | 7,433,400) | 11,070,700) | 9,638,700) | 8,303,700) | 8,849,200) | 5,727,900) | 6,231,900) | 6,125,300) | 5,816,000) | 9,848,100) | 8,559,800) | 8,638,300) | 10,391,600) | 7,874,700) | 8,025,500) | 8,867,400) | 10,195,500) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||
| Cash ratio1 | 0.35 | 0.53 | 0.47 | 0.24 | 0.20 | 0.33 | 0.19 | 0.28 | 0.35 | 0.65 | 0.64 | 0.67 | 0.86 | 1.68 | 3.41 | 0.06 | 0.22 | ||||||
| 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-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,618,300 ÷ 7,433,400 = 0.35
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibit significant volatility over the observed periods. There is a notable peak in September 2016, reaching approximately 27.4 billion US dollars, followed by a decline to around 5.8 billion US dollars in June 2017. After this, the cash balances generally hover between 1.2 billion and 6.4 billion US dollars, with no clear upward or downward trend. The lowest points are recorded in September 2018, at just under 1.21 billion US dollars, while a moderate increase is seen towards the end of 2019 and into early 2020.
- Current Liabilities
- The level of current liabilities also shows fluctuations but remains relatively high throughout the periods. It starts at approximately 10.2 billion US dollars in the first quarter of 2016, declines to around 7.9 billion US dollars by the end of 2016, and then spikes again to over 10 billion US dollars in the first quarter of 2017. From mid-2017 to early 2018, current liabilities decrease to a range between 5.7 billion and 6.2 billion US dollars, then rise again in subsequent quarters, peaking at over 11 billion US dollars in the final quarter of 2019 before declining to approximately 7.4 billion US dollars in the first quarter of 2020.
- Cash Ratio
- The cash ratio, measuring the company’s ability to cover current liabilities with cash assets, varies substantially across the reported quarters. There is an exceptional high value in September 2016 at 3.41, signaling strong liquidity during that period, followed by a progressive decline to around 0.64 by the end of 2017. Subsequently, the ratio remains below 0.5 for most quarters, occasionally rising to nearly 0.53 by the end of 2019, reflecting a generally modest cushion of cash against current liabilities. The trend indicates a tightening liquidity position over time, with occasional small recoveries.
- Overall Observations
- The financial data depict a pattern of fluctuating liquidity, with significant peaks in cash assets and cash ratio notably early in the observed timeframe. Current liabilities remain substantial, often exceeding cash assets by a considerable margin, as evidenced by a cash ratio mostly below 1. This suggests reliance on other current assets or financing sources to meet short-term obligations. The volatility of cash assets may indicate episodic changes in cash management strategy, funding activities, or operational cash flows. The trend towards lower liquidity ratios implies more constrained short-term financial flexibility in recent quarters.