Stock Analysis on Net
Stock Analysis on Net

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity 

Vertex Pharmaceuticals Inc., common-size consolidated balance sheet: liabilities and stockholders’ equity

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Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Accounts payable 1.83 1.61 1.67 1.45 1.32
Product revenue accruals 7.18 7.55 7.17 6.31 6.65
Payroll and benefits 1.56 1.30 1.36 1.42 1.44
Research, development and commercial contract costs 1.42 1.17 1.09 1.28 1.16
Royalty payable 1.20 1.05 1.18 1.49 1.41
Tax related accruals 0.71 0.44 0.68 1.57 0.89
Other 0.29 0.18 0.23 0.42 0.40
Accrued expenses 12.38% 11.68% 11.72% 12.50% 11.96%
Milestones payable 0.14 0.98 0.00 0.00 0.00
Contract liabilities 0.92 0.75 0.88 1.28 1.63
Current operating lease liabilities 0.39 0.15 0.27 0.25 0.09
Current finance lease liabilities 0.02 0.22 0.22 0.35 0.36
Other 0.14 0.22 0.34 0.12 0.62
Other current liabilities 1.61% 2.32% 1.72% 2.00% 2.70%
Current liabilities 15.82% 15.61% 15.11% 15.95% 15.98%
Long-term operating lease liabilities 6.85 1.53 2.09 2.81 2.98
Long-term finance lease liabilities 0.50 1.65 2.37 3.80 4.59
Tax-related liabilities 3.10 3.00 2.49 0.00 0.00
Contingent consideration 0.34 0.34 0.63 1.39 1.61
Other 0.56 0.52 0.65 0.87 0.92
Other long-term liabilities 4.00% 3.86% 3.78% 2.26% 2.54%
Long-term liabilities 11.36% 7.05% 8.24% 8.86% 10.10%
Total liabilities 27.18% 22.66% 23.35% 24.81% 26.08%
Preferred stock, $0.01 par value; none issued and outstanding 0.00 0.00 0.00 0.00 0.00
Common stock, $0.01 par value 0.01 0.01 0.01 0.02 0.02
Additional paid-in capital 29.61 32.77 40.69 51.23 67.17
Accumulated other comprehensive income (loss) 0.57 -0.06 0.00 0.12 -0.58
Retained earnings 42.63 44.62 35.94 23.83 7.31
Shareholders’ equity 72.82% 77.34% 76.65% 75.19% 73.92%
Total liabilities and shareholders’ equity 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Current liabilities trends
Current liabilities as a percentage of total liabilities and shareholders’ equity remained relatively stable from 2020 to 2024, fluctuating slightly between 15.11% and 15.95%, ending at 15.82% in 2024. Among the components of current liabilities, product revenue accruals showed an increasing trend from 6.65% in 2020 to a peak of 7.55% in 2023, then slightly decreased to 7.18% in 2024. Accounts payable increased gradually from 1.32% to 1.83% over the period, indicating a moderate increase in short-term obligations to suppliers.
Payroll and benefits decreased from 1.44% in 2020 to 1.3% in 2023 but then rose to 1.56% in 2024, showing some volatility. Research, development, and commercial contract costs as a percentage decreased initially but then increased, peaking at 1.42% in 2024 after a low in 2022. Royalty payable displayed a downward trend from 1.41% to 1.05% by 2023, then slightly rose to 1.2% in 2024. Tax-related accruals fluctuated significantly, doubling from 0.89% in 2020 to 1.57% in 2021 but subsequently declining and then partially recovering toward 0.71% by 2024.
Accrued expenses and miscellaneous current liabilities
Accrued expenses consistently represented the largest single component of current liabilities, ranging modestly from 11.96% to 12.5% between 2020 and 2021, then slightly decreasing to 11.68% in 2023 before rising again to 12.38% in 2024.
Other current liabilities declined from 2.7% in 2020 to 1.61% in 2024. Contract liabilities showed a continuous decrease from 1.63% in 2020 to a low of 0.75% in 2023, followed by a minor increase to 0.92% in 2024. Milestones payable appeared only in 2023 and 2024 at low levels, evidencing a recent addition to current liabilities. Short-term lease liabilities experienced fluctuations but remained a small portion overall.
Long-term liabilities developments
Long-term liabilities as a portion of total liabilities and equity decreased steadily from 10.1% in 2020 to a low of 7.05% in 2023 but then sharply increased to 11.36% in 2024. This late increase was largely driven by a significant rise in long-term operating lease liabilities, which surged from 1.53% in 2023 to 6.85% in 2024, reversing a prior downward trend.
Long-term finance lease liabilities steadily decreased from 4.59% in 2020 to a minimal level of 0.5% in 2024. Tax-related liabilities appeared starting in 2022, increasing modestly through 2024. Contingent consideration liabilities diminished considerably from 1.61% in 2020 to 0.34% by 2024. Other long-term liabilities increased slightly towards the end of the period, ultimately constituting 4% in 2024.
Total liabilities and shareholders’ equity
Total liabilities showed a general downward trend from 26.08% of total liabilities and shareholders’ equity in 2020 to 22.66% in 2023, before rising notably to 27.18% in 2024, primarily due to increases in long-term liabilities.
Shareholders’ equity fluctuated inversely, increasing from 73.92% in 2020 to a peak of 77.34% in 2023, then declining to 72.82% in 2024. This decline aligns with the rise in total liabilities in 2024. Retained earnings as a component of equity increased significantly from 7.31% in 2020 up to 44.62% in 2023, then slightly decreased to 42.63% in 2024, indicating accumulation of profits over the years, with a small reduction in the latest period.
Additional paid-in capital declined markedly from 67.17% in 2020 to 29.61% in 2024, suggesting that earlier equity contributions have diminished relative to other equity components, possibly due to stock buybacks, dilution, or reclassification.
The accumulated other comprehensive income (loss) remained near zero, oscillating slightly between positive and negative values, having minimal effect on overall equity.
Summary of financial position
The company's financial structure demonstrates a tendency toward gradually increasing liabilities relative to equity in 2024 after several years of declining liabilities. The consistent growth in retained earnings reflects profitability accumulation, while the falling additional paid-in capital indicates changing equity composition. The sharp growth in long-term operating lease liabilities in 2024 is noteworthy and suggests a strategic or operational shift affecting long-term obligations.
Current liabilities show relative stability in proportion to total funding sources, with some variations in specific accruals and payables. Overall, the company maintains a majority of funding through shareholders’ equity, though the increase in liabilities in 2024 may warrant closer monitoring of leverage and associated risks.