Allergan (FRA:AG4) Interest Coverage : 40.17 (As of Dec. 2014)

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What is Allergan Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Allergan's Operating Income for the three months ended in Dec. 2014 was €508 Mil. Allergan's Interest Expense for the three months ended in Dec. 2014 was €-13 Mil. Allergan's interest coverage for the quarter that ended in Dec. 2014 was 40.17. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Allergan's Interest Coverage or its related term are showing as below:

FRA:AG4' s Interest Coverage Range Over the Past 10 Years
Min: 0 Med: 0 Max: 29.11
Current: 29.11

FRA:AG4's Interest Coverage is not ranked
in the Drug Manufacturers industry.
Industry Median: 12.09 vs FRA:AG4: 29.11

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Allergan Interest Coverage Historical Data

The historical data trend for Allergan's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Allergan Interest Coverage Chart

Allergan Annual Data

Trend

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Interest Coverage

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3.29

19.01

25.33

24.12

28.95

Allergan Quarterly Data
	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14
Interest Coverage	Get a 7-Day Free Trial															24.99	24.33	30.86	21.35	40.17

Competitive Comparison of Allergan's Interest Coverage

For the Drug Manufacturers - Specialty & Generic subindustry, Allergan's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Allergan's Interest Coverage Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Allergan's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Allergan's Interest Coverage falls into.

Allergan Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Allergan's Interest Coverage for the fiscal year that ended in Dec. 2014 is calculated as

Here, for the fiscal year that ended in Dec. 2014, Allergan's Interest Expense was €-56 Mil. Its Operating Income was €1,630 Mil. And its Long-Term Debt & Capital Lease Obligation was €1,691 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2014 )	/	Interest Expense (A: Dec. 2014 )
	=	-1	*	1629.542	/	-56.283
	=	28.95

Allergan's Interest Coverage for the quarter that ended in Dec. 2014 is calculated as

Here, for the three months ended in Dec. 2014, Allergan's Interest Expense was €-13 Mil. Its Operating Income was €508 Mil. And its Long-Term Debt & Capital Lease Obligation was €1,691 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2014 )	/	Interest Expense (Q: Dec. 2014 )
	=	-1	*	508.254	/	-12.652
	=	40.17

The higher the ratio, the stronger the company's Financial Strength is.

Allergan (FRA:AG4) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Allergan Interest Coverage Related Terms

Thank you for viewing the detailed overview of Allergan's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Allergan (FRA:AG4) Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Allergan Inc (FRA:AG4) » Definitions » Interest Coverage

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Address

Website

Allergan IncÂ incorporated in Delaware in 1977.Â It is a multi-specialty health care company. The Company is engaged in the developing and commercializing pharmaceuticals, biologics, medical devices and over-the-counter products that enable people to live life to its full potential - to see more clearly, move more freely and express themselves more fully. It offers products for the ophthalmic, neurological, medical aesthetics, medical dermatology, breast aesthetics, urological and other specialty markets in more than 100 countries around the world. It is also engaged in specialty pharmaceutical, biologic and medical device research and development. The Company's business segments are specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces pharmaceutical products, including: ophthalmic products for dry eye, glaucoma, inflammation, infection, allergy and retinal disease;Â BotoxÂ for certain therapeutic and aesthetic indications; skin care products for acne, psoriasis, eyelash growth and other prescription and over-the-counter skin care products; and urologics products. The medical devices segment produces medical devices, including: breast implants for augmentation, revision and reconstructive surgery and tissue expanders; and facial aesthetics products. The Company sells its products directly through itsÂ own sales subsidiaries in approximately 40 countries and, supplemented by independent distributors, in over 100 countries.Â Its products are sold to drug wholesalers, independent and chain drug stores, pharmacies, commercial optical chains, opticians, mass merchandisers, food stores, hospitals, group purchasing organizations, integrated direct hospital networks, ambulatory surgery centers, government purchasing agencies and medical practitioners. The Company also utilize distributors for its products in smaller international markets.Â The Company's competitors include Akorn, Inc., Alcon Laboratories, Inc./Novartis AG, Abbott Laboratories, Alimera Sciences, Inc., BauschÂ & Lomb, Inc., a division of Valeant, Genentech/Hoffmann La Roche AG, MerckÂ & Co., Pfizer Inc., Regeneron Pharmaceuticals, Inc. and Santen Seiyaku. Mentor and Sientra, Inc., or Sientra, a partner of Silimed, LifeCell Corporation, CR Bard Inc. The Company's operations are subject to federal, state, local and foreign environmental laws and regulations, including the U.S. Occupational Safety and Health Act, the U.S. Toxic Substances Control Act, the U.S. Resource Conservation and Recovery Act, Superfund Amendments and Reauthorization Act, Comprehensive Environmental Response, Compensation and Liability Act and other current and potential future federal, state or local regulations.

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