Allergan (FRA:AG4) ROE % : 29.52% (As of Dec. 2014)

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What is Allergan ROE %?

ROE % is calculated as Net Income divided by its average Total Stockholders Equity over a certain period of time. Allergan's annualized net income for the quarter that ended in Dec. 2014 was €1,743 Mil. Allergan's average Total Stockholders Equity over the quarter that ended in Dec. 2014 was €5,903 Mil. Therefore, Allergan's annualized ROE % for the quarter that ended in Dec. 2014 was 29.52%.

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

FRA:AG4's ROE % is not ranked ^*
in the Drug Manufacturers industry.
Industry Median: 4.13
* Ranked among companies with meaningful ROE % only.

Allergan ROE % Historical Data

The historical data trend for Allergan's ROE % 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.

* Premium members only.

Allergan ROE % Chart

Allergan Annual Data

Trend

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

ROE %

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0.01

18.61

19.74

15.69

22.46

Allergan Quarterly Data
	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14
ROE %	Get a 7-Day Free Trial															19.71	15.66	25.12	18.45	29.52

Competitive Comparison of Allergan's ROE %

For the Drug Manufacturers - Specialty & Generic subindustry, Allergan's ROE %, along with its competitors' market caps and ROE % 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 ROE % Distribution in the Drug Manufacturers Industry

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

* The bar in red indicates where Allergan's ROE % falls into.

Allergan ROE % Calculation

Allergan's annualized ROE % for the fiscal year that ended in Dec. 2014 is calculated as

ROE %	=	Net Income (A: Dec. 2014 )	/	( (Total Stockholders Equity (A: Dec. 2013 )	+	Total Stockholders Equity (A: Dec. 2014 ))	/ count )
	=	1236.126	/	( (4718.136	+	6287.683)	/ 2 )
	=	1236.126	/	5502.9095
	=	22.46 %

Allergan's annualized ROE % for the quarter that ended in Dec. 2014 is calculated as

ROE %	=	Net Income (Q: Dec. 2014 )	/	( (Total Stockholders Equity (Q: Sep. 2014 )	+	Total Stockholders Equity (Q: Dec. 2014 ))	/ count )
	=	1742.676	/	( (5517.903	+	6287.683)	/ 2 )
	=	1742.676	/	5902.793
	=	29.52 %

In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income data used here is four times the quarterly (Dec. 2014) net income data. ROE % is displayed in the 30-year financial page.

Allergan (FRA:AG4) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

	ROE %		(Q: Dec. 2014 )
=	Net Income	/	Total Stockholders Equity
=	1742.676	/	5902.793
=	(Net Income / Revenue )	*	(Revenue / Total Assets)	*	(Total Assets / Total Stockholders Equity)
=	(1742.676 / 6197.66)	*	(6197.66 / 9553.137)	*	(9553.137 / 5902.793)
=	Net Margin %	*	Asset Turnover	*	Equity Multiplier
=	28.12 %	*	0.6488	*	1.6184
=	ROA %	*	Equity Multiplier
=	18.24 %	*	1.6184
=	29.52 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

	ROE %		(Q: Dec. 2014 )
=	Net Income	/	Total Stockholders Equity
=	1742.676	/	5902.793
=	(Net Income / Pre-Tax Income)	*	(Pre-Tax Income / Operating Income)	*	(Operating Income / Revenue)	*	(Revenue / Total Assets)	*	(Total Assets / Total Stockholders Equity)
=	(1742.676 / 2056.372)	*	(2056.372 / 2033.016)	*	(2033.016 / 6197.66)	*	(6197.66 / 9553.137)	*	(9553.137 / 5902.793)
=	Tax Burden	*	Interest Burden	*	Operating Margin %	*	Asset Turnover	*	Equity Multiplier
=	0.8475	*	1.0115	*	32.8 %	*	0.6488	*	1.6184
=	29.52 %

Note: The net income data used here is four times the quarterly (Dec. 2014) net income data. The Revenue data used here is four times the quarterly (Dec. 2014) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
^* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.

Be Aware

Net Income is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.

Allergan ROE % Related Terms

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Allergan (FRA:AG4) Business Description

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

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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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