Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Allergan PLC, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
- Debt to equity ratio
- The debt to equity ratio reveals a general declining trend from 0.62 in March 2015 to 0.34 by March 2020, indicating a gradual reduction in reliance on debt relative to equity over the observed period. The ratio fluctuated slightly within certain years but sustained a downward movement overall, suggesting strengthening equity or reduction of debt levels.
- Debt to equity ratio (including operating lease liability)
- This adjusted ratio closely follows the trend of the standard debt to equity ratio but exhibits minor variations, ending at 0.35 in March 2020. The inclusion of operating lease liability slightly raises the ratio in some quarters, implying that lease obligations have a moderate impact on the company’s financial leverage measures.
- Debt to capital ratio
- The debt to capital ratio also declined over the period, from 0.38 in early 2015 to 0.25 in the first quarter of 2020. This decrease highlights an improving capital structure with a relatively lower proportion of debt in the overall capital employed.
- Debt to capital ratio (including operating lease liability)
- Including operating lease liabilities results in a slightly higher ratio than the unadjusted version, but it follows the same overall downward trend, ending at 0.26 in March 2020. This indicates that while lease liabilities contribute to total capital, their impact remains relatively modest.
- Debt to assets ratio
- The debt to assets ratio decreases from 0.32 in early 2015 to 0.22 by the last quarter of 2019, with a slight uptick in some periods toward 2020 but ultimately declining again to 0.22 in March 2020. The trend reflects a reduction in debt financing relative to total assets, indicating a more conservative asset financing approach.
- Debt to assets ratio (including operating lease liability)
- Incorporating operating lease liabilities increases the ratio marginally across the periods, with a consistent pattern mirroring the basic debt to assets ratio. It ends at 0.23 in March 2020. This suggests that lease liabilities contribute slightly to the asset financing structure without major deviations in trend.
- Financial leverage
- Financial leverage declines from 1.95 in March 2015 to 1.52 by March 2020, showing a decrease in the extent to which assets are financed by debt. This decline aligns with the observed reductions in debt to equity and debt to capital ratios and indicates a strengthening equity base or a decrease in liabilities.
- Interest coverage ratio
- The interest coverage ratio presents a concerning negative trend, with significant negative values reported from the end of 2015 through to the first quarter of 2020. Starting with mild negative figures around -2.71 in late 2015, the ratio deteriorates drastically reaching values as low as -11.84 by the end of 2019, before improving slightly to -4.39 in March 2020. This implies substantial recurring operating losses or insufficient earnings before interest and taxes to cover interest expenses consistently, representing potential financial stress or poor profitability during the period.
Debt Ratios
Coverage Ratios
Debt to Equity
Allergan PLC, debt to equity calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | 2,432,800) | 2,035,400) | 1,550,900) | 1,624,100) | |||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | 40,293,400) | 40,648,100) | 41,319,400) | 42,700,500) | |||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | 76,591,400) | 77,473,700) | 72,069,100) | 71,404,800) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to equity1 | 0.34 | 0.39 | 0.39 | 0.38 | 0.38 | 0.37 | 0.33 | 0.36 | 0.37 | 0.41 | 0.43 | 0.40 | 0.42 | 0.43 | 0.37 | 0.52 | 0.55 | 0.56 | 0.55 | 0.59 | 0.62 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Amgen Inc. | 3.36 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Bristol-Myers Squibb Co. | 0.94 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Danaher Corp. | 0.84 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eli Lilly & Co. | 5.60 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Gilead Sciences Inc. | 1.09 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Johnson & Johnson | 0.45 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Merck & Co. Inc. | 1.07 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Pfizer Inc. | 0.80 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Regeneron Pharmaceuticals Inc. | 0.06 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Thermo Fisher Scientific Inc. | 0.70 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Vertex Pharmaceuticals Inc. | 0.08 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q1 2020 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 19,549,700 ÷ 57,997,700 = 0.34
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a general downward trend over the analyzed periods. Beginning at approximately $44.3 billion in March 2015, the debt declines with some fluctuations, reaching about $19.5 billion by March 2020. Notably, significant reductions occurred between June 2016 and September 2016, as well as from December 2017 to March 2018. After a relatively stable phase around 22 to 23 billion between 2018 and 2019, the debt experiences another notable decrease entering 2020.
- Shareholders’ Equity
- Shareholders’ equity exhibits volatility with an overall decline from early 2015 through to 2020. Starting at roughly $71.4 billion in March 2015, equity increased to peak near $89.7 billion by September 2016. However, from that high point, it generally trended downward, falling steadily through 2017 and 2018. By March 2020, equity reached approximately $5.8 billion less than in early 2015 levels, totaling around $58.0 billion. The decrease post-2016 suggests possible significant shareholder value changes, possibly related to operational factors or capital structure adjustments.
- Debt to Equity Ratio
- The debt to equity ratio demonstrates a meaningful reduction over the period, indicating a shift towards lower leverage. Starting at 0.62 in March 2015, the ratio declines steadily, hitting a low of 0.33 by September 2018. Minor variations follow, but the ratio remains below 0.4 for most of 2017 through early 2020, ending at 0.34 in March 2020. This pattern reflects management's efforts to reduce financial risk by decreasing the proportion of debt relative to equity.
Debt to Equity (including Operating Lease Liability)
Allergan PLC, debt to equity (including operating lease liability) calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | 2,432,800) | 2,035,400) | 1,550,900) | 1,624,100) | |||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | 40,293,400) | 40,648,100) | 41,319,400) | 42,700,500) | |||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Current portion of lease liability, operating | 119,800) | 124,400) | 118,400) | 123,200) | 116,100) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Lease liability, operating, excluding current portion | 438,300) | 446,100) | 437,400) | 414,800) | 415,200) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 20,107,800) | 23,219,500) | 23,081,000) | 23,241,500) | 24,057,200) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | 76,591,400) | 77,473,700) | 72,069,100) | 71,404,800) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | 0.35 | 0.40 | 0.39 | 0.39 | 0.39 | 0.37 | 0.33 | 0.36 | 0.37 | 0.41 | 0.43 | 0.40 | 0.42 | 0.43 | 0.37 | 0.52 | 0.55 | 0.56 | 0.55 | 0.59 | 0.62 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | 0.08 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q1 2020 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 20,107,800 ÷ 57,997,700 = 0.35
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- Over the observed periods, total debt demonstrates a general downward trend. Starting at approximately 44.3 billion USD in the first quarter of 2015, there is a gradual reduction with some periods showing more pronounced declines, notably from mid-2016 through early 2018. The debt level decreases from around 42.6 billion USD in late 2015 to about 20.1 billion USD by the first quarter of 2020, reflecting a significant reduction in the company’s leverage obligations over the five-year span.
- Shareholders’ Equity
- Shareholders’ equity exhibits notable fluctuations during the period. Beginning at roughly 71.4 billion USD in early 2015, it increases to nearly 89.7 billion USD by the third quarter of 2016, marking a period of growth. Following this peak, equity declines steadily from late 2016 onward, falling below 58 billion USD by the first quarter of 2020. This decline indicates a contraction in net asset value or possible distributions affecting equity.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio reflects the interplay between debt reduction and equity fluctuations. Initially at 0.62 in early 2015, the ratio generally trends downwards, reaching a trough near 0.33 by the third quarter of 2018, suggesting a strengthening equity base relative to debt. However, from late 2018 to early 2020, the ratio rises slightly again to around 0.40 before descending to 0.35 at the start of 2020. This pattern corresponds with the period of declining equity coupled with continued debt reduction, implying a relative stabilization of leverage towards the end of the timeline.
- Overall Financial Position Insights
- The data reveals a strategic reduction in total debt, which more than halved over the five-year period. Concurrently, shareholders’ equity experienced growth followed by a sustained decline after 2016. The debt to equity ratio decreasing over the majority of the timeline suggests improved capitalization and potentially lower financial risk initially. However, the latter period's rising ratio coupled with falling equity hints at challenges impacting equity values. The combination of these trends may indicate a shifting capital structure and changes in financial stability that warrant ongoing monitoring.
Debt to Capital
Allergan PLC, debt to capital calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | 2,432,800) | 2,035,400) | 1,550,900) | 1,624,100) | |||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | 40,293,400) | 40,648,100) | 41,319,400) | 42,700,500) | |||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | 76,591,400) | 77,473,700) | 72,069,100) | 71,404,800) | |||||||
| Total capital | 77,547,400) | 80,822,600) | 81,000,400) | 82,378,200) | 85,067,900) | 88,911,800) | 94,091,200) | 96,594,000) | 98,890,500) | 103,896,400) | 101,495,500) | 105,458,700) | 106,937,800) | 108,961,400) | 122,495,900) | 116,225,600) | 120,017,500) | 119,317,600) | 120,157,200) | 114,939,400) | 115,729,400) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to capital1 | 0.25 | 0.28 | 0.28 | 0.28 | 0.28 | 0.27 | 0.25 | 0.26 | 0.27 | 0.29 | 0.30 | 0.29 | 0.30 | 0.30 | 0.27 | 0.34 | 0.35 | 0.36 | 0.36 | 0.37 | 0.38 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||||||
| AbbVie Inc. | 1.12 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Amgen Inc. | 0.77 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Bristol-Myers Squibb Co. | 0.48 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Danaher Corp. | 0.46 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eli Lilly & Co. | 0.85 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Gilead Sciences Inc. | 0.52 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Johnson & Johnson | 0.31 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Merck & Co. Inc. | 0.52 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Pfizer Inc. | 0.45 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Regeneron Pharmaceuticals Inc. | 0.06 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Thermo Fisher Scientific Inc. | 0.41 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Vertex Pharmaceuticals Inc. | 0.08 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q1 2020 Calculation
Debt to capital = Total debt ÷ Total capital
= 19,549,700 ÷ 77,547,400 = 0.25
2 Click competitor name to see calculations.
- Total Debt
- The total debt displayed a general downward trend from March 31, 2015, to March 31, 2020. Starting at approximately 44.3 billion US dollars, total debt declined steadily with some fluctuations, reaching around 19.5 billion US dollars by the last reported date. Notably, there was a sharp decrease between June 30, 2016, and September 30, 2016, where total debt dropped significantly from about 39.6 billion to 32.8 billion US dollars. After this point, total debt continued a gradual decline with minor variations. The trend suggests active debt reduction over the period analyzed.
- Total Capital
- Total capital remained relatively stable during the early periods, hovering around 115-120 billion US dollars until June 30, 2016. Following this timeframe, there was a general decline in total capital, moving from approximately 108.9 billion US dollars on December 31, 2016, to close to 77.5 billion US dollars by March 31, 2020. This shows a consistent decrease over the last several years, indicating either a reduction in equity, liabilities other than debt, or asset base.
- Debt to Capital Ratio
- The debt to capital ratio started at 0.38 in March 2015 and showed a gradual decrease, reaching the lowest recorded ratio of 0.25 on March 31, 2020. The ratio followed a downward trajectory with minor fluctuations, evidencing an improvement in the company's leverage position over time. Noteworthy is the reduction from 0.35 on March 31, 2016, to 0.27 on September 30, 2016, coinciding with the substantial decline in total debt during that period. The ratio’s stabilization around 0.28 during 2017 and 2019, followed by its further decrease to 0.25 in early 2020, reflects ongoing strengthening of the capital structure relative to debt.
Debt to Capital (including Operating Lease Liability)
Allergan PLC, debt to capital (including operating lease liability) calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | 2,432,800) | 2,035,400) | 1,550,900) | 1,624,100) | |||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | 40,293,400) | 40,648,100) | 41,319,400) | 42,700,500) | |||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Current portion of lease liability, operating | 119,800) | 124,400) | 118,400) | 123,200) | 116,100) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Lease liability, operating, excluding current portion | 438,300) | 446,100) | 437,400) | 414,800) | 415,200) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 20,107,800) | 23,219,500) | 23,081,000) | 23,241,500) | 24,057,200) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | 76,591,400) | 77,473,700) | 72,069,100) | 71,404,800) | |||||||
| Total capital (including operating lease liability) | 78,105,500) | 81,393,100) | 81,556,200) | 82,916,200) | 85,599,200) | 88,911,800) | 94,091,200) | 96,594,000) | 98,890,500) | 103,896,400) | 101,495,500) | 105,458,700) | 106,937,800) | 108,961,400) | 122,495,900) | 116,225,600) | 120,017,500) | 119,317,600) | 120,157,200) | 114,939,400) | 115,729,400) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | 0.26 | 0.29 | 0.28 | 0.28 | 0.28 | 0.27 | 0.25 | 0.26 | 0.27 | 0.29 | 0.30 | 0.29 | 0.30 | 0.30 | 0.27 | 0.34 | 0.35 | 0.36 | 0.36 | 0.37 | 0.38 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | 0.08 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q1 2020 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 20,107,800 ÷ 78,105,500 = 0.26
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's capital structure over the period from March 31, 2015, to March 31, 2020.
- Total Debt (including operating lease liability)
-
Total debt started at approximately 44.3 billion USD in the first quarter of 2015. A general decreasing trend is observed over the subsequent quarters, with some periods of relative stability. For example, debt levels declined moderately through 2016 and 2017, reaching around 30 billion USD by the end of 2017. This downward trajectory continued with some fluctuations, culminating in a reduction to approximately 20.1 billion USD by the first quarter of 2020. This consistent decrease suggests an active effort to reduce debt obligations over the five-year span.
- Total Capital (including operating lease liability)
-
The total capital exhibited some volatility but overall showed a declining pattern throughout the period. Starting at about 115.7 billion USD in early 2015, the figure momentarily increased, peaking near 122.5 billion USD in the third quarter of 2016. However, from late 2016 onward, total capital steadily decreased, dropping to roughly 78.1 billion USD by March 2020. This significant reduction hints at a shrinking capital base, which might reflect changes in equity, asset base, or other capital components.
- Debt to Capital Ratio (including operating lease liability)
-
The debt-to-capital ratio demonstrates a gradual decrease from 0.38 in the first quarter of 2015 to 0.26 by March 2020. The most notable drop occurred between mid-2016 and late 2016 when the ratio decreased from 0.34 to 0.27, aligning with a sharp reduction in total debt. Following this period, the ratio remained relatively stable, fluctuating between 0.25 and 0.30 before finally declining slightly toward the end of the timeframe. This trend indicates an improvement in the company’s leverage position, with debt becoming a smaller portion of total capital over time.
In summary, the company appears to have pursued a strategy of debt reduction, as evidenced by the consistent fall in total debt and a corresponding decrease in the debt-to-capital ratio. This was accompanied by a decline in total capital, which might warrant further investigation to understand underlying factors such as changes in assets or equity structure. The overall financial leverage improved, suggesting lower risk exposure related to debt financing by the end of the analyzed period.
Debt to Assets
Allergan PLC, debt to assets calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | 2,432,800) | 2,035,400) | 1,550,900) | 1,624,100) | |||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | 40,293,400) | 40,648,100) | 41,319,400) | 42,700,500) | |||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Total assets | 88,426,200) | 94,699,100) | 94,408,900) | 95,480,700) | 98,036,300) | 101,787,600) | 106,542,500) | 108,858,800) | 112,021,300) | 118,341,900) | 118,992,800) | 124,734,800) | 126,836,900) | 128,986,300) | 143,607,700) | 132,619,100) | 136,073,700) | 135,840,700) | 142,816,300) | 138,411,100) | 139,460,700) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to assets1 | 0.22 | 0.24 | 0.24 | 0.24 | 0.24 | 0.23 | 0.22 | 0.23 | 0.24 | 0.25 | 0.25 | 0.24 | 0.25 | 0.25 | 0.23 | 0.30 | 0.31 | 0.31 | 0.30 | 0.31 | 0.32 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||||||
| AbbVie Inc. | 0.74 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Amgen Inc. | 0.52 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Bristol-Myers Squibb Co. | 0.36 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Danaher Corp. | 0.38 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eli Lilly & Co. | 0.42 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Gilead Sciences Inc. | 0.40 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Johnson & Johnson | 0.18 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Merck & Co. Inc. | 0.33 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Pfizer Inc. | 0.31 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Regeneron Pharmaceuticals Inc. | 0.05 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Thermo Fisher Scientific Inc. | 0.34 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Vertex Pharmaceuticals Inc. | 0.06 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q1 2020 Calculation
Debt to assets = Total debt ÷ Total assets
= 19,549,700 ÷ 88,426,200 = 0.22
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits a general downward trend over the observed periods. Starting at approximately $44.3 billion at the end of the first quarter of 2015, the debt level declined gradually, with notable reductions beginning mid-2016. By the end of 2016, total debt had decreased to around $32.8 billion and continued a steady decline to approximately $19.5 billion by the first quarter of 2020. This represents an overall debt reduction of nearly 56% during the analyzed timeframe.
- Total Assets
- Total assets show some fluctuations but overall demonstrate a decreasing trend throughout the periods analyzed. Beginning at about $139.5 billion at the end of March 2015, total assets declined with minor fluctuations, particularly showing a peak in the third quarter of 2016 at roughly $143.6 billion. From that point onward, total assets decreased consistently, reaching approximately $88.4 billion by the first quarter of 2020. This indicates an overall reduction in asset base by about 37% over the period.
- Debt to Assets Ratio
- The debt to assets ratio has remained relatively stable, fluctuating mostly between 0.22 and 0.32. Initially, the ratio was around 0.32 at the start of 2015. There was a noticeable decrease by late 2016, reaching a low of about 0.23. Following this, the ratio stabilized near the 0.24 level, with minor variations occurring through early 2020 and ending at approximately 0.22. This suggests that the reduction in debt proportionally outpaced the decline in total assets, indicating an improving capital structure with lesser leverage over time.
- Summary of Trends
- In summary, the financial data indicate a concerted effort to reduce leverage through the systematic reduction of total debt. Despite decreases in total assets, the company has improved its debt to assets ratio, reflecting a stronger balance sheet and potentially a lower financial risk profile. The declining asset base, however, may warrant further analysis to understand the underlying causes, such as asset disposals or impairments. The stability in leverage ratios amid these changes suggests balanced financial management aimed at sustainability.
Debt to Assets (including Operating Lease Liability)
Allergan PLC, debt to assets (including operating lease liability) calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | 2,432,800) | 2,035,400) | 1,550,900) | 1,624,100) | |||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | 40,293,400) | 40,648,100) | 41,319,400) | 42,700,500) | |||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Current portion of lease liability, operating | 119,800) | 124,400) | 118,400) | 123,200) | 116,100) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Lease liability, operating, excluding current portion | 438,300) | 446,100) | 437,400) | 414,800) | 415,200) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 20,107,800) | 23,219,500) | 23,081,000) | 23,241,500) | 24,057,200) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | 42,726,200) | 42,683,500) | 42,870,300) | 44,324,600) | |||||||
| Total assets | 88,426,200) | 94,699,100) | 94,408,900) | 95,480,700) | 98,036,300) | 101,787,600) | 106,542,500) | 108,858,800) | 112,021,300) | 118,341,900) | 118,992,800) | 124,734,800) | 126,836,900) | 128,986,300) | 143,607,700) | 132,619,100) | 136,073,700) | 135,840,700) | 142,816,300) | 138,411,100) | 139,460,700) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | 0.23 | 0.25 | 0.24 | 0.24 | 0.25 | 0.23 | 0.22 | 0.23 | 0.24 | 0.25 | 0.25 | 0.24 | 0.25 | 0.25 | 0.23 | 0.30 | 0.31 | 0.31 | 0.30 | 0.31 | 0.32 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | 0.06 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q1 2020 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 20,107,800 ÷ 88,426,200 = 0.23
2 Click competitor name to see calculations.
The financial data over the examined periods reveal several notable trends regarding the company's leverage and asset base.
- Total Debt (including operating lease liability)
- The total debt demonstrates a general downward trajectory from March 2015 through March 2020. Initially, debt levels were approximately 44.3 billion US dollars, gradually decreasing with occasional modest fluctuations. A pronounced reduction is observed starting in mid-2016, where debt declines sharply from around 39.6 billion to about 23.1 billion by the end of 2019. The trend continues into early 2020, reaching near 20.1 billion US dollars. This trend reflects a consistent effort to reduce overall debt burden over the five-year period.
- Total Assets
- The total assets show a gradual decrease during the observation period. From roughly 139.5 billion US dollars at the beginning of 2015, total assets decline with some variability, reaching approximately 88.4 billion in March 2020. This overall reduction is steady, indicating a contraction in the asset base or possible asset disposals. The incremental decreases are not steep but consistent, suggesting strategic downsizing or asset optimization activities.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio remains relatively stable, fluctuating mostly between 0.22 and 0.32 throughout the timeframe. Starting at 0.32 in early 2015, the ratio decreases intermittently, reaching a low near 0.22 in late 2018, before rising slightly again toward 0.25 toward the end of 2019 and early 2020. This stability, despite falling absolute values of debt and assets, indicates that reductions in debt and assets are proportionate, maintaining a consistent leverage level relative to total assets.
Overall, the data suggest a strategic focus on debt reduction alongside a shrinking asset base, resulting in relatively stable leverage ratios. This pattern could signify efforts to strengthen the financial structure by lowering debt while managing the scale of assets, potentially to improve financial flexibility and reduce risk exposure.
Financial Leverage
Allergan PLC, financial leverage calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Total assets | 88,426,200) | 94,699,100) | 94,408,900) | 95,480,700) | 98,036,300) | 101,787,600) | 106,542,500) | 108,858,800) | 112,021,300) | 118,341,900) | 118,992,800) | 124,734,800) | 126,836,900) | 128,986,300) | 143,607,700) | 132,619,100) | 136,073,700) | 135,840,700) | 142,816,300) | 138,411,100) | 139,460,700) | |||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | 76,591,400) | 77,473,700) | 72,069,100) | 71,404,800) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Financial leverage1 | 1.52 | 1.63 | 1.61 | 1.60 | 1.59 | 1.56 | 1.51 | 1.53 | 1.55 | 1.60 | 1.67 | 1.66 | 1.69 | 1.69 | 1.60 | 1.73 | 1.76 | 1.77 | 1.84 | 1.92 | 1.95 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Amgen Inc. | 6.50 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Bristol-Myers Squibb Co. | 2.59 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Danaher Corp. | 2.22 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eli Lilly & Co. | 13.35 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Gilead Sciences Inc. | 2.71 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Johnson & Johnson | 2.53 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Merck & Co. Inc. | 3.24 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Pfizer Inc. | 2.56 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Regeneron Pharmaceuticals Inc. | 1.30 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Thermo Fisher Scientific Inc. | 2.05 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Vertex Pharmaceuticals Inc. | 1.38 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q1 2020 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 88,426,200 ÷ 57,997,700 = 1.52
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the key financial metrics over the observed periods.
- Total Assets
- Total assets exhibited a general downward trend from March 31, 2015, to March 31, 2020. Initially recorded at approximately 139.46 billion USD, total assets fluctuated but gradually declined, reaching around 88.43 billion USD by the end of the period. This represents a significant reduction in asset base over the five-year span. The peak value occurred in September 30, 2016, at approximately 143.61 billion USD, after which a consistent decrease followed.
- Shareholders’ Equity
- Shareholders’ equity also displayed a decreasing trend during the same timeframe. Starting from roughly 71.4 billion USD at the beginning of 2015, it rose slightly to a peak of about 89.73 billion USD in September 2016 before declining progressively to approximately 58.0 billion USD by March 31, 2020. The decline in equity aligns with the reduction in total assets, indicating a contraction in net value available to shareholders.
- Financial Leverage
- The financial leverage ratio, defined as total assets divided by shareholders’ equity, showed moderate fluctuations with a slight overall increase towards the end of the period. The ratio began at 1.95 in March 2015 and generally trended downward until mid-2018 reaching lows near 1.51. However, after this period, leverage increased gently again to 1.52 by March 2020. The change in leverage suggests a relative increase in asset funding through liabilities over equity in later periods, despite an overall contraction in the company’s asset base.
Overall, the data indicates that the entity experienced a contraction in both total assets and shareholders’ equity from 2015 to early 2020, accompanied by a modest adjustment in financial leverage. The peak values in 2016 suggest that the company may have undergone restructuring or divestitures subsequently, leading to the reduced scale of operations reflected in the assets and equity. The slight rebound in financial leverage towards the end implies an increased reliance on debt or liabilities to finance asset holdings in the later quarters of the analysis period.
Interest Coverage
Allergan PLC, interest coverage calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Net income (loss) attributable to shareholders | 378,000) | (317,200) | (786,800) | (1,759,000) | (2,408,000) | (4,299,900) | (37,900) | (472,500) | (286,100) | 3,121,300) | (3,955,700) | (725,900) | (2,565,200) | (600) | 15,220,000) | (501,700) | 255,700) | (630,900) | 5,301,200) | (243,100) | (512,000) | |||||||
| Add: Net income attributable to noncontrolling interest | 1,000) | (100) | 1,200) | 4,100) | 700) | 4,000) | 1,600) | 2,400) | 2,200) | 1,900) | 1,700) | 2,000) | 1,000) | 1,800) | 1,800) | 1,800) | 700) | 1,600) | 1,400) | 1,500) | (300) | |||||||
| Less: Income (loss) from discontinued operations, net of tax | —) | —) | —) | —) | —) | —) | —) | —) | —) | (385,300) | (6,100) | (8,400) | (3,100) | 41,300) | 15,601,900) | (77,300) | 348,600) | 355,900) | 6,157,400) | —) | 274,400) | |||||||
| Add: Income tax expense | (1,866,800) | (104,700) | 18,100) | 301,600) | (68,600) | (1,296,700) | 213,400) | (5,200) | (682,200) | (3,918,300) | (1,638,800) | (581,200) | (532,100) | (1,071,200) | (158,900) | (258,200) | (408,700) | (170,700) | (824,900) | (307,300) | (259,000) | |||||||
| Add: Interest expense | 184,500) | 191,900) | 193,900) | 195,400) | 201,800) | 210,200) | 220,400) | 230,000) | 250,600) | 263,300) | 265,200) | 277,400) | 289,700) | 292,700) | 324,300) | 345,800) | 332,800) | 341,300) | 340,200) | 339,900) | 171,900) | |||||||
| Earnings before interest and tax (EBIT) | (1,303,300) | (230,100) | (573,600) | (1,257,900) | (2,274,100) | (5,382,400) | 397,500) | (245,300) | (715,500) | (146,500) | (5,321,500) | (1,019,300) | (2,803,500) | (818,600) | (214,700) | (335,000) | (168,100) | (814,600) | (1,339,500) | (209,000) | (873,800) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Interest coverage1 | -4.39 | -5.54 | -11.84 | -10.29 | -8.70 | -6.53 | -0.74 | -6.37 | -6.82 | -8.48 | -8.86 | -4.10 | -3.33 | -1.19 | -1.14 | -1.95 | -1.87 | -2.71 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q1 2020 Calculation
Interest coverage
= (EBITQ1 2020
+ EBITQ4 2019
+ EBITQ3 2019
+ EBITQ2 2019)
÷ (Interest expenseQ1 2020
+ Interest expenseQ4 2019
+ Interest expenseQ3 2019
+ Interest expenseQ2 2019)
= (-1,303,300 + -230,100 + -573,600 + -1,257,900)
÷ (184,500 + 191,900 + 193,900 + 195,400)
= -4.39
2 Click competitor name to see calculations.
The earnings before interest and tax (EBIT) exhibited notable volatility over the observed periods. Initially, the EBIT was significantly negative, with a profound dip around the third quarter of 2017, reaching its lowest point in this timeframe. Although there were some intermittent recoveries, including a positive spike towards the end of 2018, the overall trend remained predominantly negative, particularly marked by substantial losses in several quarters of 2019 and the first quarter of 2020. This pattern suggests ongoing challenges in generating operating profits consistently.
Interest expense demonstrated a gradual declining trend from the first quarter of 2015 to the first quarter of 2020. Starting from a high point in early 2015, the interest expense steadily decreased, indicating a possible reduction in debt levels or refinancing at lower interest rates. The continuous decline in interest expense over these years reflects improvements in managing financial costs.
The interest coverage ratio, which measures the company’s ability to meet interest obligations from earnings, consistently remained negative or below one throughout the reported periods. This indicates that EBIT was insufficient to cover interest expenses, with several quarters showing severely negative ratios. The trend worsened significantly during 2017 and 2019, indicating increased difficulty in covering interest charges with operating income. A slight improvement was noted at the end of 2018; however, this was not sustained. The persistent negative interest coverage ratio highlights ongoing operational and financial stress.
- EBIT
- Volatile with significant negative values; lowest in late 2017; intermittent positive quarter at end of 2018; predominantly negative through 2019 and early 2020.
- Interest Expense
- Gradually decreased over the period, indicating potential debt reduction or refinancing benefits.
- Interest Coverage Ratio
- Consistently below one and often negative, indicating insufficient EBIT to cover interest costs; worsened notably in 2017 and 2019.