Financial statement analysis and common stock valuation

Analysis of Debt

• Total Debt (Carrying Amount)
• Total Debt (Fair Value)
• Weighted-average Interest Rate on Debt

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

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 Short-term (Operating) Activity Ratios
Quarterly Data

Evaluates revenues and output generated by the Vertex Pharmaceuticals Inc. assets. Operating performance ratios describe the relationship between the Vertex Pharmaceuticals Inc. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle
• Average Payables Payment Period
• Cash Conversion Cycle

Common-Size Income Statement
Quarterly Data

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

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Vertex Pharmaceuticals Inc. common stock issue as the present value of all future dividends.

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

Income Statement
Quarterly Data

The income statement (statement of earnings) reports on the performance of Vertex Pharmaceuticals Inc., the result of its operating activities.

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)

Common-Size Income Statement

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

Balance Sheet: Assets

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

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

An approach to decomposing Vertex Pharmaceuticals Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin