Financial statement analysis and common stock valuation

Analysis of Revenues

• Revenues as Reported

Common Stock Valuation Ratios
Quarterly Data

Relative valuation technique determine the value of Vertex Pharmaceuticals Inc. by comparing it to similar entities (like industry or sector) on the basis of several relative ratios that compare its stock price to relevant variables that affect the stock value, such as earnings, book value, and sales.

• Historical Valuation Ratios (Summary)
• Price to Earnings (P/E)
• Price to Operating Profit (P/OP)
• Price to Sales (P/S)
• Price to Book Value (P/BV)

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to Vertex Pharmaceuticals Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to Equity (FCFE)
• P to FCFE Ratio, Current
• P to FCFE Ratio, Historical

Analysis of Profitability Ratios

Measures the income of Vertex Pharmaceuticals Inc. relative to its revenues and invested capital.

• Profitability Ratios (Summary)
• Gross Profit Margin
• Operating Profit Margin
• Net Profit Margin
• Return on Equity (ROE)
• Return on Assets (ROA)

Balance Sheet: Assets
Quarterly Data

The assets reports major classes and amounts of resources owned or controlled by Vertex Pharmaceuticals Inc..

Analysis of Liquidity Ratios

Measures the adequacy of Vertex Pharmaceuticals Inc. cash resources to meet its near-term cash obligations.

• Liquidity Ratios (Summary)
• Current Ratio
• Quick Ratio
• Cash Ratio

Analysis of Long-term (Investment) Activity Ratios
Quarterly Data

Measures how efficiently Vertex Pharmaceuticals Inc. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Total Asset Turnover
• Equity Turnover

Common Stock Valuation Ratios

Relative valuation technique determine the value of Vertex Pharmaceuticals Inc. by comparing it to similar entities (like industry or sector) on the basis of several relative ratios that compare its stock price to relevant variables that affect the stock value, such as earnings, book value, and sales.

• Current Valuation Ratios
• Historical Valuation Ratios (Summary)
• Price to Earnings (P/E)
• Price to Operating Profit (P/OP)
• Price to Sales (P/S)
• Price to Book Value (P/BV)

Present Value of Free Cash Flow to Equity (FCFE)

The FCFE valuation approach estimates the value of equity as the present value of future FCFE discounted at the required rate of return on equity.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• FCFE Growth Rate (g)

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Vertex Pharmaceuticals Inc. during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Common-Size Income Statement
Quarterly Data

Income statement components (revenues and expenses) shown as percentage of total sales.

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Vertex Pharmaceuticals Inc. reported financial statements reflect its operating performance and to their usefulness for forecasting future cash flows.
Aggregate accruals deriving measures of the accrual component of Vertex Pharmaceuticals Inc. earnings.

• Balance-Sheet-Based Accruals Ratio
• Cash-Flow-Statement-Based Accruals Ratio