Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Financial Reporting Quality: Aggregate Accruals

Advanced level


Balance-Sheet-Based Accruals Ratio

Vertex Pharmaceuticals Inc., balance sheet computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Operating Assets
Total assets 8,318,465  6,245,898  3,546,014  2,896,787  2,498,875 
Less: Cash and cash equivalents 3,109,322  2,650,134  1,665,412  1,183,945  714,768 
Less: Marketable securities 698,972  518,108  423,254  250,612  327,694 
Operating assets 4,510,171  3,077,656  1,457,348  1,462,230  1,456,413 
Operating Liabilities
Total liabilities 2,233,221  1,810,695  1,503,708  1,558,596  1,405,247 
Less: Senior secured term loan, current portion —  —  —  —  71,478 
Less: Credit facility —  —  —  300,000  — 
Less: Current finance lease liabilities 30,293  5,271  —  —  — 
Less: Long-term finance lease liabilities 538,576  581,550  583,902  521,335  515,534 
Less: Senior secured term loan, excluding current portion —  —  —  —  223,969 
Operating liabilities 1,664,352  1,223,874  919,806  737,261  594,266 
 
Net operating assets1 2,845,819  1,853,782  537,542  724,969  862,147 
Balance-sheet-based aggregate accruals2 992,037  1,316,240  (187,427) (137,178)
Financial Ratio
Balance-sheet-based accruals ratio3 42.22% 110.08% -29.69% -17.29%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Abbott Laboratories -1.97% -6.71% 69.42% -1.06%
AbbVie Inc. -24.37% -31.42% -7.02% 25.20%
Allergan PLC -14.93% -11.32% 1.78% -21.00%
Amgen Inc. 56.66% -9.88% -33.04% -6.85%
Biogen Inc. -4.05% 3.85% 7.67% 9.75%
Bristol-Myers Squibb Co. 147.33% -3.17% -24.97% -0.82%
Eli Lilly & Co. -0.10% -10.27% -5.99% 1.26%
Gilead Sciences Inc. 19.80% -41.29% -16.94% 23.56%
Illumina Inc. -2.16% 10.15% 6.34% 23.87%
Johnson & Johnson -3.85% -8.03% 31.51% 5.55%
Merck & Co. Inc. -2.90% -15.70% -0.65% -12.97%
Pfizer Inc. 19.85% -9.34% 12.36% 4.12%
Regeneron Pharmaceuticals Inc. 25.36% 20.14% 33.15% 26.37%
Zoetis Inc. 4.03% 29.08% -1.25% 8.66%
Balance-Sheet-Based Accruals Ratio, Sector
Pharmaceuticals & Biotechnology 17.59% -10.97% 8.49% -1.55%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 12.75% -2.07% 8.07% 0.80%

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-16).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 4,510,1711,664,352 = 2,845,819

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 2,845,8191,853,782 = 992,037

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 992,037 ÷ [(2,845,819 + 1,853,782) ÷ 2] = 42.22%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Vertex Pharmaceuticals Inc. improved earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

Vertex Pharmaceuticals Inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income (loss) attributable to Vertex 1,176,810  2,096,896  263,484  (112,052) (556,334)
Less: Net cash provided by (used in) operating activities 1,569,330  1,270,286  844,942  236,103  (365,432)
Less: Net cash (used in) provided by investing activities (1,235,318) (202,158) (437,681) 104,469  268,856 
Cash-flow-statement-based aggregate accruals 842,798  1,028,768  (143,777) (452,624) (459,758)
Financial Ratio
Cash-flow-statement-based accruals ratio1 35.87% 86.04% -22.78% -57.04%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Abbott Laboratories -1.39% -5.39% 12.34% -6.46%
AbbVie Inc. -28.46% -23.85% -12.92% 16.02%
Allergan PLC -11.92% -15.00% -9.44% -10.08%
Amgen Inc. -29.37% -95.70% -22.85% 22.06%
Biogen Inc. -10.98% 1.91% 6.65% 12.70%
Bristol-Myers Squibb Co. 10.75% -1.14% -28.29% 0.76%
Eli Lilly & Co. 74.20% -25.54% -11.43% 5.63%
Gilead Sciences Inc. 19.49% -73.15% 28.23% 29.15%
Illumina Inc. -33.57% 65.79% 3.10% 16.01%
Johnson & Johnson -3.04% -5.08% -7.40% 4.68%
Merck & Co. Inc. -2.28% -19.26% -13.29% -5.97%
Pfizer Inc. 7.93% -10.12% 10.69% -1.06%
Regeneron Pharmaceuticals Inc. 22.48% 28.32% 19.22% 13.64%
Zoetis Inc. 2.95% 31.33% -4.07% 6.41%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Pharmaceuticals & Biotechnology 0.46% -16.12% -2.48% 1.99%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 2.26% -7.01% -0.36% 3.57%

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-16).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 842,798 ÷ [(2,845,819 + 1,853,782) ÷ 2] = 35.87%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Vertex Pharmaceuticals Inc. improved earnings quality from 2018 to 2019.