Allergan (FRA:AG4) Sloan Ratio % : -4.71% (As of Dec. 2014)

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What is Allergan Sloan Ratio %?

Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.

Allergan's Sloan Ratio for the quarter that ended in Dec. 2014 was -4.71%.

As of Dec. 2014, Allergan has a Sloan Ratio of -4.71%, indicating the company is in the safe zone and there is no funny business with accruals.

Allergan Sloan Ratio % Historical Data

The historical data trend for Allergan's Sloan Ratio % 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 Sloan Ratio % Chart

Allergan Annual Data

Trend

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Sloan Ratio %

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6.19

-5.74

0.96

6.29

-4.72

Allergan Quarterly Data
	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14
Sloan Ratio %	Get a 7-Day Free Trial															6.65	4.10	0.93	-3.26	-4.71

Competitive Comparison of Allergan's Sloan Ratio %

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

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

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

Allergan Sloan Ratio % Calculation

Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.

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

Sloan Ratio	=	(Net Income (A: Dec. 2014 )	-	Cash Flow from Operations (A: Dec. 2014 )
	-	Cash Flow from Investing (A: Dec. 2014 ))	/	Total Assets (A: Dec. 2014 )
	=	(1236.126	-	1563.446
	-	148.17)	/	10069.133
	=	-4.72%

Allergan's Sloan Ratio for the quarter that ended in Dec. 2014 is calculated as

Sloan Ratio	=	(Net Income (TTM)	-	Cash Flow from Operations (TTM))
	-	Cash Flow from Investing (TTM))	/	Total Assets (Q: Dec. 2014 )
	=	(1171.256	-	1492.55
	-	152.616)	/	10069.133
	=	-4.71%

Allergan's Net Income for the trailing twelve months (TTM) ended in Dec. 2014 was 186.028 (Mar. 2014 ) + 307.059 (Jun. 2014 ) + 242.5 (Sep. 2014 ) + 435.669 (Dec. 2014 ) = €1,171 Mil.
Allergan's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2014 was 119.873 (Mar. 2014 ) + 348.349 (Jun. 2014 ) + 461.332 (Sep. 2014 ) + 562.996 (Dec. 2014 ) = €1,493 Mil.
Allergan's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2014 was -185.666 (Mar. 2014 ) + 144.109 (Jun. 2014 ) + 76.902 (Sep. 2014 ) + 117.271 (Dec. 2014 ) = €153 Mil.

Allergan (FRA:AG4) Sloan Ratio % Explanation

A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.

According to How to Beat the Market with the Sloan Ratio:

If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.

If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.

If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.

As of Dec. 2014, Allergan has a Sloan Ratio of -4.71%, indicating the company is in the safe zone and there is no funny business with accruals.

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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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