Switch to:
Allergan PLC (NYSE:AGN)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Allergan PLC has an F-score of 6 indicating the company's financial situation is typical for a stable company.

AGN' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 8
Current: 6

1
8

During the past 13 years, the highest Piotroski F-Score of Allergan PLC was 8. The lowest was 1. And the median was 6.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Net Income was -732.9 + -512 + -243.1 + 5301.2 = $3,813 Mil.
Cash Flow from Operations was 811.6 + 525 + 1401.3 + 1048.2 = $3,786 Mil.
Revenue was 4056.9 + 4234.2 + 5755 + 4088.9 = $18,135 Mil.
Gross Profit was 2225.6 + 2520.8 + 3624.9 + 2846 = $11,217 Mil.
Average Total Assets from the begining of this year (Sep14)
to the end of this year (Sep15) was
(53467.4 + 52529.1 + 139460.7 + 138411.1 + 142816.3) / 5 = $105336.92 Mil.
Total Assets at the begining of this year (Sep14) was $53,467 Mil.
Long-Term Debt was $40,648 Mil.
Total Current Assets was $16,659 Mil.
Total Current Liabilities was $8,133 Mil.
Net Income was -148.4 + 96.5 + 48.7 + -1042.8 = $-1,046 Mil.

Revenue was 2779.3 + 2655.1 + 2667.2 + 3683.1 = $11,785 Mil.
Gross Profit was 1307.7 + 1362.1 + 1370.7 + 1800.1 = $5,841 Mil.
Average Total Assets from the begining of last year (Sep13)
to the end of last year (Sep14) was
(13644.1 + 22725.9 + 22403.9 + 25789.4 + 53467.4) / 5 = $27606.14 Mil.
Total Assets at the begining of last year (Sep13) was $13,644 Mil.
Long-Term Debt was $15,094 Mil.
Total Current Assets was $6,252 Mil.
Total Current Liabilities was $4,481 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Allergan PLC's current net income (TTM) was 3,813. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Allergan PLC's current cash flow from operations (TTM) was 3,786. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Sep14)
=3813.2/53467.4
=0.07131822

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=-1046/13644.1
=-0.07666317

Allergan PLC's return on assets of this year was 0.07131822. Allergan PLC's return on assets of last year was -0.07666317. ==> This year is higher. ==> Score 1.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Allergan PLC's current net income (TTM) was 3,813. Allergan PLC's current cash flow from operations (TTM) was 3,786. ==> 3,786 <= 3,813 ==> CFROA <= ROA ==> Score 0.

Funding

Question 5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=40648.1/105336.92
=0.38588654

Gearing (Last Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=15093.8/27606.14
=0.54675518

Allergan PLC's gearing of this year was 0.38588654. Allergan PLC's gearing of last year was 0.54675518. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Sep15)=Total Current Assets/Total Current Liabilities
=16658.7/8133
=2.04828477

Current Ratio (Last Year: Sep14)=Total Current Assets/Total Current Liabilities
=6252.3/4481.3
=1.39519782

Allergan PLC's current ratio of this year was 2.04828477. Allergan PLC's current ratio of last year was 1.39519782. ==> This year's current ratio is higher. ==> Score 1.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Allergan PLC's number of shares in issue this year was 393.6. Allergan PLC's number of shares in issue last year was 264.3. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=11217.3/18135
=0.61854425

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=5840.6/11784.7
=0.49560871

Allergan PLC's gross margin of this year was 0.61854425. Allergan PLC's gross margin of last year was 0.49560871. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Sep14)
=18135/53467.4
=0.33917864

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=11784.7/13644.1
=0.86372132

Allergan PLC's asset turnover of this year was 0.33917864. Allergan PLC's asset turnover of last year was 0.86372132. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+0+1+1+0+1+0
=6

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Allergan PLC has an F-score of 6 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Allergan PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 0111111001
Question 2 1111111111
Question 3 0110010001
Question 4 1111111111
Question 5 0110110111
Question 6 0110101010
Question 7 1001000000
Question 8 0111110111
Question 9 1111011000
F-score 4886675456

Allergan PLC Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Question 1 0001000011
Question 2 1111111111
Question 3 0001100011
Question 4 1111111101
Question 5 0111010111
Question 6 0011010010
Question 7 0000000000
Question 8 1111111111
Question 9 1000000000
F-score 4457453466
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK