Allergan (FRA:AG4) Degree of Financial Leverage : 0.00 (As of Dec. 2014)

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What is Allergan Degree of Financial Leverage?

Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT). Allergan's Degree of Financial Leverage for the quarter that ended in Dec. 2014 was 0.00. The higher Degree of Financial Leverage, the more volatile earnings will be.

The industry rank for Allergan's Degree of Financial Leverage or its related term are showing as below:

FRA:AG4's Degree of Financial Leverage is not ranked ^*
in the Drug Manufacturers industry.
Industry Median: 0.98
* Ranked among companies with meaningful Degree of Financial Leverage only.

Allergan Degree of Financial Leverage Historical Data

The historical data trend for Allergan's Degree of Financial Leverage 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.

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Allergan Degree of Financial Leverage Chart

Allergan Annual Data

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Degree of Financial Leverage

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Allergan Quarterly Data
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Competitive Comparison of Allergan's Degree of Financial Leverage

For the Drug Manufacturers - Specialty & Generic subindustry, Allergan's Degree of Financial Leverage, along with its competitors' market caps and Degree of Financial Leverage 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 Degree of Financial Leverage Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Allergan's Degree of Financial Leverage distribution charts can be found below:

* The bar in red indicates where Allergan's Degree of Financial Leverage falls into.

Allergan Degree of Financial Leverage Calculation

Allergan's Degree of Financial Leverage for the quarter that ended in Dec. 2014 is calculated as:

Degree of Financial Leverage	=	% Change in Earnings per Share (Diluted)^**	/	% Change in EBIT
	=	( 4.063 (Dec. 2014) / 2.38 (Dec. 2013) - 1 )	/	( 1669.606 (Dec. 2014) / 1318.234 (Dec. 2013) - 1 )
	=	0.7071	/	0.2665
	=	2.65^***

** TTM data of EPS and EBIT was used to calculate Degree of Financial Leverage.
*** Please be aware that the Degree of Financial Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.

Allergan (FRA:AG4) Degree of Financial Leverage Explanation

Degree of Financial Leverage (DFL) is a leverage ratio that measures the sensitivity of a company’s Earnings per Share (EPS) to fluctuations in its operating income, also referred to as Earnings Before Interest and Taxes (EBIT), resulting from adjustments in its capital structure. DFL is an essential tool for companies to assess the appropriate level of debt or financial leverage in their capital structure. When EBIT remains relatively stable, it results in stable earnings and earnings per share. In such cases, the company may consider taking on substantial debt. However, for companies operating in industries with significant fluctuations in EBIT, it is advisable to keep debt at a manageable level.

The higher Degree of Financial Leverage, the more volatile earnings will be. Because interest is a fixed expense, leverage can amplify earnings and EPS. This is beneficial when EBIT is growing, but it can become problematic in tough economic conditions when EBIT is under pressure.

Be Aware

The use of financial leverage varies across different industries and business sectors, and the application of Degree of Financial Leverage (DFL) should be adjusted accordingly.

Allergan Degree of Financial Leverage Related Terms

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Allergan (FRA:AG4) Business Description

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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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