Allergan (FRA:AG4) ROIC % : 36.82% (As of Dec. 2014)

View and export this data going back to . Start your Free Trial

What is Allergan ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Allergan's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2014 was 36.82%.

As of today (2024-06-16), Allergan's WACC % is 0.00%. Allergan's ROIC % is 0.00% (calculated using TTM income statement data). Allergan earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Allergan ROIC % Historical Data

The historical data trend for Allergan's ROIC % 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 ROIC % Chart

Allergan Annual Data

Trend

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

ROIC %

Get a 7-Day Free Trial

0.16

19.69

22.68

23.88

27.82

Allergan Quarterly Data
	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14
ROIC %	Get a 7-Day Free Trial															22.13	18.66	30.17	20.27	36.82

Competitive Comparison of Allergan's ROIC %

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

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

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

Allergan ROIC % Calculation

Allergan's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2014 is calculated as:

	ROIC % (A: Dec. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2013 )	+	Invested Capital (A: Dec. 2014 ))	/ count )
=	1629.542 * ( 1 - 22.96% )	/	( (4187.645	+	4836.886)	/ 2 )
=	1255.3991568	/	4512.2655
=	27.82 %

where

	Invested Capital		(A: Dec. 2013 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	7719.239	-	867.751	-	( 2663.843	-	max(0, 908.339	-	3883.381	+	2663.843	))
=	4187.645

	Invested Capital		(A: Dec. 2014 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	10069.133	-	1204.497	-	( 4027.75	-	max(0, 1262.97	-	5572.543	+	4027.75	))
=	4836.886

Allergan's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2014 is calculated as:

	ROIC % (Q: Dec. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2014 )	+	Invested Capital (Q: Dec. 2014 ))	/ count )
=	2033.016 * ( 1 - 14.4% )	/	( (4616.58	+	4836.886)	/ 2 )
=	1740.261696	/	4726.733
=	36.82 %

where

	Invested Capital		(Q: Sep. 2014 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	9037.141	-	1172.691	-	( 3247.87	-	max(0, 1215.992	-	4736.549	+	3247.87	))
=	4616.58

	Invested Capital		(Q: Dec. 2014 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	10069.133	-	1204.497	-	( 4027.75	-	max(0, 1262.97	-	5572.543	+	4027.75	))
=	4836.886

Note: The Operating Income data used here is four times the quarterly (Dec. 2014) data.

Allergan (FRA:AG4) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Allergan's WACC % is 0.00%. Allergan's ROIC % is 0.00% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Allergan ROIC % Related Terms

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

Allergan (FRA:AG4) Business Description

Industry

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

Comparable Companies

Traded in Other Exchanges

N/A

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.

Allergan (FRA:AG4) Headlines

No Headlines