Stock Analysis on Net
Stock Analysis on Net
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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, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Activity Ratio
Total Asset Turnover
Reported 0.53 0.50 0.49 0.70 0.59
Adjusted 0.57 0.58 0.54 0.56 0.44
Solvency Ratios
Debt to Equity
Reported 0.07 0.09 0.13 0.29 0.71
Adjusted 0.12 0.14 0.49 0.74 1.20
Debt to Capital
Reported 0.06 0.09 0.12 0.22 0.42
Adjusted 0.11 0.12 0.33 0.42 0.55
Financial Leverage
Reported 1.35 1.37 1.41 1.75 2.50
Adjusted 1.39 1.46 1.91 2.18 2.61
Profitability Ratios
Net Profit Margin
Reported 43.70% 28.27% 68.80% 10.59% -6.58%
Adjusted 47.09% 32.23% 20.06% -2.76% -2.81%
Return on Equity (ROE)
Reported 31.22% 19.34% 47.28% 12.99% -9.69%
Adjusted 37.45% 27.41% 20.82% -3.35% -3.25%
Return on Assets (ROA)
Reported 23.07% 14.15% 33.57% 7.43% -3.87%
Adjusted 26.89% 18.82% 10.91% -1.54% -1.24%

Based on: 10-K (filing date: 2021-02-11), 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).

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 improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
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 2018 to 2019 and from 2019 to 2020.
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 2018 to 2019 and from 2019 to 2020.
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 2018 to 2019 and from 2019 to 2020.
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 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted total equity. Vertex Pharmaceuticals Inc.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Vertex Pharmaceuticals Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.

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


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Reported
Selected Financial Data (US$ in thousands)
Revenues 6,205,683  4,162,821  3,047,597  2,488,652  1,702,177 
Total assets 11,751,808  8,318,465  6,245,898  3,546,014  2,896,787 
Activity Ratio
Total asset turnover1 0.53 0.50 0.49 0.70 0.59
Adjusted
Selected Financial Data (US$ in thousands)
Revenues 6,205,683  4,162,821  3,047,597  2,488,652  1,702,177 
Adjusted total assets2 10,869,029  7,127,650  5,603,559  4,466,896  3,844,878 
Activity Ratio
Adjusted total asset turnover3 0.57 0.58 0.54 0.56 0.44

Based on: 10-K (filing date: 2021-02-11), 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).

1 2020 Calculation
Total asset turnover = Revenues ÷ Total assets
= 6,205,683 ÷ 11,751,808 = 0.53

2 Adjusted total assets. See details »

3 2020 Calculation
Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 6,205,683 ÷ 10,869,029 = 0.57

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 improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Adjusted Debt to Equity

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Reported
Selected Financial Data (US$ in thousands)
Total debt 581,476  577,370  586,821  583,902  821,335 
Total Vertex shareholders’ equity 8,686,815  6,085,244  4,435,203  2,028,579  1,156,582 
Solvency Ratio
Debt to equity1 0.07 0.09 0.13 0.29 0.71
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total debt2 942,460  673,166  1,444,154  1,505,618  1,769,762 
Adjusted total shareholders’ equity3 7,804,036  4,894,429  2,935,531  2,047,824  1,471,918 
Solvency Ratio
Adjusted debt to equity4 0.12 0.14 0.49 0.74 1.20

Based on: 10-K (filing date: 2021-02-11), 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).

1 2020 Calculation
Debt to equity = Total debt ÷ Total Vertex shareholders’ equity
= 581,476 ÷ 8,686,815 = 0.07

2 Adjusted total debt. See details »

3 Adjusted total shareholders’ equity. See details »

4 2020 Calculation
Adjusted debt to equity = Adjusted total debt ÷ Adjusted total shareholders’ equity
= 942,460 ÷ 7,804,036 = 0.12

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 2018 to 2019 and from 2019 to 2020.

Adjusted Debt to Capital

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Reported
Selected Financial Data (US$ in thousands)
Total debt 581,476  577,370  586,821  583,902  821,335 
Total capital 9,268,291  6,662,614  5,022,024  2,612,481  1,977,917 
Solvency Ratio
Debt to capital1 0.06 0.09 0.12 0.22 0.42
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total debt2 942,460  673,166  1,444,154  1,505,618  1,769,762 
Adjusted total capital3 8,746,496  5,567,595  4,379,685  3,553,442  3,241,680 
Solvency Ratio
Adjusted debt to capital4 0.11 0.12 0.33 0.42 0.55

Based on: 10-K (filing date: 2021-02-11), 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).

1 2020 Calculation
Debt to capital = Total debt ÷ Total capital
= 581,476 ÷ 9,268,291 = 0.06

2 Adjusted total debt. See details »

3 Adjusted total capital. See details »

4 2020 Calculation
Adjusted debt to capital = Adjusted total debt ÷ Adjusted total capital
= 942,460 ÷ 8,746,496 = 0.11

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 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Reported
Selected Financial Data (US$ in thousands)
Total assets 11,751,808  8,318,465  6,245,898  3,546,014  2,896,787 
Total Vertex shareholders’ equity 8,686,815  6,085,244  4,435,203  2,028,579  1,156,582 
Solvency Ratio
Financial leverage1 1.35 1.37 1.41 1.75 2.50
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total assets2 10,869,029  7,127,650  5,603,559  4,466,896  3,844,878 
Adjusted total shareholders’ equity3 7,804,036  4,894,429  2,935,531  2,047,824  1,471,918 
Solvency Ratio
Adjusted financial leverage4 1.39 1.46 1.91 2.18 2.61

Based on: 10-K (filing date: 2021-02-11), 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).

1 2020 Calculation
Financial leverage = Total assets ÷ Total Vertex shareholders’ equity
= 11,751,808 ÷ 8,686,815 = 1.35

2 Adjusted total assets. See details »

3 Adjusted total shareholders’ equity. See details »

4 2020 Calculation
Adjusted financial leverage = Adjusted total assets ÷ Adjusted total shareholders’ equity
= 10,869,029 ÷ 7,804,036 = 1.39

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 2018 to 2019 and from 2019 to 2020.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Reported
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to Vertex 2,711,647  1,176,810  2,096,896  263,484  (112,052)
Revenues 6,205,683  4,162,821  3,047,597  2,488,652  1,702,177 
Profitability Ratio
Net profit margin1 43.70% 28.27% 68.80% 10.59% -6.58%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)2 2,922,481  1,341,565  611,202  (68,594) (47,826)
Revenues 6,205,683  4,162,821  3,047,597  2,488,652  1,702,177 
Profitability Ratio
Adjusted net profit margin3 47.09% 32.23% 20.06% -2.76% -2.81%

Based on: 10-K (filing date: 2021-02-11), 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).

1 2020 Calculation
Net profit margin = 100 × Net income (loss) attributable to Vertex ÷ Revenues
= 100 × 2,711,647 ÷ 6,205,683 = 43.70%

2 Adjusted net income (loss). See details »

3 2020 Calculation
Adjusted net profit margin = 100 × Adjusted net income (loss) ÷ Revenues
= 100 × 2,922,481 ÷ 6,205,683 = 47.09%

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 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Reported
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to Vertex 2,711,647  1,176,810  2,096,896  263,484  (112,052)
Total Vertex shareholders’ equity 8,686,815  6,085,244  4,435,203  2,028,579  1,156,582 
Profitability Ratio
ROE1 31.22% 19.34% 47.28% 12.99% -9.69%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)2 2,922,481  1,341,565  611,202  (68,594) (47,826)
Adjusted total shareholders’ equity3 7,804,036  4,894,429  2,935,531  2,047,824  1,471,918 
Profitability Ratio
Adjusted ROE4 37.45% 27.41% 20.82% -3.35% -3.25%

Based on: 10-K (filing date: 2021-02-11), 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).

1 2020 Calculation
ROE = 100 × Net income (loss) attributable to Vertex ÷ Total Vertex shareholders’ equity
= 100 × 2,711,647 ÷ 8,686,815 = 31.22%

2 Adjusted net income (loss). See details »

3 Adjusted total shareholders’ equity. See details »

4 2020 Calculation
Adjusted ROE = 100 × Adjusted net income (loss) ÷ Adjusted total shareholders’ equity
= 100 × 2,922,481 ÷ 7,804,036 = 37.45%

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 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Reported
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to Vertex 2,711,647  1,176,810  2,096,896  263,484  (112,052)
Total assets 11,751,808  8,318,465  6,245,898  3,546,014  2,896,787 
Profitability Ratio
ROA1 23.07% 14.15% 33.57% 7.43% -3.87%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)2 2,922,481  1,341,565  611,202  (68,594) (47,826)
Adjusted total assets3 10,869,029  7,127,650  5,603,559  4,466,896  3,844,878 
Profitability Ratio
Adjusted ROA4 26.89% 18.82% 10.91% -1.54% -1.24%

Based on: 10-K (filing date: 2021-02-11), 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).

1 2020 Calculation
ROA = 100 × Net income (loss) attributable to Vertex ÷ Total assets
= 100 × 2,711,647 ÷ 11,751,808 = 23.07%

2 Adjusted net income (loss). See details »

3 Adjusted total assets. See details »

4 2020 Calculation
Adjusted ROA = 100 × Adjusted net income (loss) ÷ Adjusted total assets
= 100 × 2,922,481 ÷ 10,869,029 = 26.89%

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 2018 to 2019 and from 2019 to 2020.