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Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Adjusted Financial Ratios

Advanced level

Adjusted Financial Ratios (Summary)

Vertex Pharmaceuticals Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Activity Ratio
Total Asset Turnover
Reported 0.50 0.49 0.70 0.59 0.41
Adjusted 0.58 0.54 0.56 0.44 0.30
Solvency Ratios
Debt to Equity
Reported 0.09 0.13 0.29 0.71 0.86
Adjusted 0.14 0.49 0.74 1.20 1.45
Debt to Capital
Reported 0.09 0.12 0.22 0.42 0.46
Adjusted 0.12 0.33 0.42 0.55 0.59
Financial Leverage
Reported 1.37 1.41 1.75 2.50 2.66
Adjusted 1.46 1.91 2.18 2.61 2.85
Profitability Ratios
Net Profit Margin
Reported 28.27% 68.80% 10.59% -6.58% -53.89%
Adjusted 32.23% 20.06% -2.76% -2.81% -56.86%
Return on Equity (ROE)
Reported 19.34% 47.28% 12.99% -9.69% -59.19%
Adjusted 27.41% 20.82% -3.35% -3.25% -48.76%
Return on Assets (ROA)
Reported 14.15% 33.57% 7.43% -3.87% -22.26%
Adjusted 18.82% 10.91% -1.54% -1.24% -17.12%

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).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Vertex Pharmaceuticals Inc.’s adjusted total asset turnover ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted debt-to-equity ratio A solvency ratio calculated as adjusted total debt divided by adjusted total equity. Vertex Pharmaceuticals Inc.’s adjusted debt-to-equity ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted debt-to-capital ratio A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. Vertex Pharmaceuticals Inc.’s adjusted debt-to-capital ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Vertex Pharmaceuticals Inc.’s adjusted financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Vertex Pharmaceuticals Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted total equity. Vertex Pharmaceuticals Inc.’s adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Vertex Pharmaceuticals Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

Vertex Pharmaceuticals Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Revenues 4,162,821  3,047,597  2,488,652  1,702,177  1,032,336 
Total assets 8,318,465  6,245,898  3,546,014  2,896,787  2,498,875 
Activity Ratio
Total asset turnover1 0.50 0.49 0.70 0.59 0.41
Adjusted
Selected Financial Data (US$ in thousands)
Revenues 4,162,821  3,047,597  2,488,652  1,702,177  1,032,336 
Adjusted total assets2 7,127,650  5,603,559  4,466,896  3,844,878  3,429,151 
Activity Ratio
Adjusted total asset turnover3 0.58 0.54 0.56 0.44 0.30

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
Total asset turnover = Revenues ÷ Total assets
= 4,162,821 ÷ 8,318,465 = 0.50

2 Adjusted total assets. See details »

3 2019 Calculation
Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 4,162,821 ÷ 7,127,650 = 0.58

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Vertex Pharmaceuticals Inc.’s adjusted total asset turnover ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Adjusted Debt to Equity

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Total debt 568,869  586,821  583,902  821,335  810,981 
Total Vertex shareholders’ equity 6,085,244  4,435,203  2,028,579  1,156,582  939,967 
Solvency Ratio
Debt to equity1 0.09 0.13 0.29 0.71 0.86
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total debt2 664,665  1,444,154  1,505,618  1,769,762  1,741,612 
Adjusted total shareholders’ equity3 4,894,429  2,935,531  2,047,824  1,471,918  1,203,712 
Solvency Ratio
Adjusted debt to equity4 0.14 0.49 0.74 1.20 1.45

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
Debt to equity = Total debt ÷ Total Vertex shareholders’ equity
= 568,869 ÷ 6,085,244 = 0.09

2 Adjusted total debt. See details »

3 Adjusted total shareholders’ equity. See details »

4 2019 Calculation
Adjusted debt to equity = Adjusted total debt ÷ Adjusted total shareholders’ equity
= 664,665 ÷ 4,894,429 = 0.14

Solvency ratio Description The company
Adjusted debt-to-equity ratio A solvency ratio calculated as adjusted total debt divided by adjusted total equity. Vertex Pharmaceuticals Inc.’s adjusted debt-to-equity ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Debt to Capital

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Total debt 568,869  586,821  583,902  821,335  810,981 
Total capital 6,654,113  5,022,024  2,612,481  1,977,917  1,750,948 
Solvency Ratio
Debt to capital1 0.09 0.12 0.22 0.42 0.46
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total debt2 664,665  1,444,154  1,505,618  1,769,762  1,741,612 
Adjusted total capital3 5,559,094  4,379,685  3,553,442  3,241,680  2,945,324 
Solvency Ratio
Adjusted debt to capital4 0.12 0.33 0.42 0.55 0.59

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
Debt to capital = Total debt ÷ Total capital
= 568,869 ÷ 6,654,113 = 0.09

2 Adjusted total debt. See details »

3 Adjusted total capital. See details »

4 2019 Calculation
Adjusted debt to capital = Adjusted total debt ÷ Adjusted total capital
= 664,665 ÷ 5,559,094 = 0.12

Solvency ratio Description The company
Adjusted debt-to-capital ratio A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. Vertex Pharmaceuticals Inc.’s adjusted debt-to-capital ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Total assets 8,318,465  6,245,898  3,546,014  2,896,787  2,498,875 
Total Vertex shareholders’ equity 6,085,244  4,435,203  2,028,579  1,156,582  939,967 
Solvency Ratio
Financial leverage1 1.37 1.41 1.75 2.50 2.66
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total assets2 7,127,650  5,603,559  4,466,896  3,844,878  3,429,151 
Adjusted total shareholders’ equity3 4,894,429  2,935,531  2,047,824  1,471,918  1,203,712 
Solvency Ratio
Adjusted financial leverage4 1.46 1.91 2.18 2.61 2.85

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
Financial leverage = Total assets ÷ Total Vertex shareholders’ equity
= 8,318,465 ÷ 6,085,244 = 1.37

2 Adjusted total assets. See details »

3 Adjusted total shareholders’ equity. See details »

4 2019 Calculation
Adjusted financial leverage = Adjusted total assets ÷ Adjusted total shareholders’ equity
= 7,127,650 ÷ 4,894,429 = 1.46

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Vertex Pharmaceuticals Inc.’s adjusted financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to Vertex 1,176,810  2,096,896  263,484  (112,052) (556,334)
Revenues 4,162,821  3,047,597  2,488,652  1,702,177  1,032,336 
Profitability Ratio
Net profit margin1 28.27% 68.80% 10.59% -6.58% -53.89%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)2 1,341,565  611,202  (68,594) (47,826) (586,976)
Revenues 4,162,821  3,047,597  2,488,652  1,702,177  1,032,336 
Profitability Ratio
Adjusted net profit margin3 32.23% 20.06% -2.76% -2.81% -56.86%

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 profit margin = 100 × Net income (loss) attributable to Vertex ÷ Revenues
= 100 × 1,176,810 ÷ 4,162,821 = 28.27%

2 Adjusted net income (loss). See details »

3 2019 Calculation
Adjusted net profit margin = 100 × Adjusted net income (loss) ÷ Revenues
= 100 × 1,341,565 ÷ 4,162,821 = 32.23%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Vertex Pharmaceuticals Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to Vertex 1,176,810  2,096,896  263,484  (112,052) (556,334)
Total Vertex shareholders’ equity 6,085,244  4,435,203  2,028,579  1,156,582  939,967 
Profitability Ratio
ROE1 19.34% 47.28% 12.99% -9.69% -59.19%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)2 1,341,565  611,202  (68,594) (47,826) (586,976)
Adjusted total shareholders’ equity3 4,894,429  2,935,531  2,047,824  1,471,918  1,203,712 
Profitability Ratio
Adjusted ROE4 27.41% 20.82% -3.35% -3.25% -48.76%

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
ROE = 100 × Net income (loss) attributable to Vertex ÷ Total Vertex shareholders’ equity
= 100 × 1,176,810 ÷ 6,085,244 = 19.34%

2 Adjusted net income (loss). See details »

3 Adjusted total shareholders’ equity. See details »

4 2019 Calculation
Adjusted ROE = 100 × Adjusted net income (loss) ÷ Adjusted total shareholders’ equity
= 100 × 1,341,565 ÷ 4,894,429 = 27.41%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted total equity. Vertex Pharmaceuticals Inc.’s adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to Vertex 1,176,810  2,096,896  263,484  (112,052) (556,334)
Total assets 8,318,465  6,245,898  3,546,014  2,896,787  2,498,875 
Profitability Ratio
ROA1 14.15% 33.57% 7.43% -3.87% -22.26%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)2 1,341,565  611,202  (68,594) (47,826) (586,976)
Adjusted total assets3 7,127,650  5,603,559  4,466,896  3,844,878  3,429,151 
Profitability Ratio
Adjusted ROA4 18.82% 10.91% -1.54% -1.24% -17.12%

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
ROA = 100 × Net income (loss) attributable to Vertex ÷ Total assets
= 100 × 1,176,810 ÷ 8,318,465 = 14.15%

2 Adjusted net income (loss). See details »

3 Adjusted total assets. See details »

4 2019 Calculation
Adjusted ROA = 100 × Adjusted net income (loss) ÷ Adjusted total assets
= 100 × 1,341,565 ÷ 7,127,650 = 18.82%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Vertex Pharmaceuticals Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.