Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Vertex Pharmaceuticals Inc., liquidity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current ratio | 2.90 | 2.69 | 3.99 | 4.83 | 4.46 | |
| Quick ratio | 2.24 | 2.17 | 3.60 | 4.46 | 4.04 | |
| Cash ratio | 1.71 | 1.72 | 3.16 | 3.93 | 3.51 |
Based on: 10-K (reporting date: 2025-12-31), 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).
The liquidity position of the company demonstrates a consistent decline across the observed period. All three liquidity ratios – current, quick, and cash – exhibit decreasing trends from 2021 through 2025, although the rate of decline varies between the ratios.
- Current Ratio
- The current ratio begins at 4.46 in 2021 and shows an initial increase to 4.83 in 2022. Following this peak, a downward trend is observed, decreasing to 3.99 in 2023, and continuing to 2.69 in 2024 before stabilizing slightly at 2.90 in 2025. This suggests a diminishing ability to cover short-term liabilities with short-term assets over time.
- Quick Ratio
- Similar to the current ratio, the quick ratio increases from 4.04 in 2021 to 4.46 in 2022. The ratio then declines steadily, reaching 3.60 in 2023, 2.17 in 2024, and 2.24 in 2025. The quick ratio’s decline mirrors that of the current ratio, indicating a consistent reduction in the ability to meet short-term obligations with the most liquid assets.
- Cash Ratio
- The cash ratio follows a similar pattern of decline. Starting at 3.51 in 2021, it rises to 3.93 in 2022, then decreases to 3.16 in 2023, 1.72 in 2024, and stabilizes at 1.71 in 2025. This represents the most substantial decrease among the three ratios, indicating a significant reduction in the company’s capacity to cover immediate liabilities with only cash and cash equivalents.
The consistent decline in all three liquidity ratios suggests a potential shift in the company’s working capital management or an increase in short-term liabilities relative to liquid assets. While the ratios remain above one throughout the period, the downward trajectory warrants further investigation to understand the underlying causes and potential implications for the company’s short-term financial health.
Current Ratio
Vertex Pharmaceuticals Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 11,201,000) | 9,596,400) | 14,144,200) | 13,234,800) | 9,560,600) | |
| Current liabilities | 3,861,200) | 3,564,600) | 3,547,400) | 2,742,100) | 2,142,000) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 2.90 | 2.69 | 3.99 | 4.83 | 4.46 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.67 | 0.66 | 0.87 | 0.96 | 0.79 | |
| Amgen Inc. | 1.14 | 1.26 | 1.65 | 1.41 | 1.59 | |
| Bristol-Myers Squibb Co. | 1.26 | 1.25 | 1.43 | 1.25 | 1.52 | |
| Danaher Corp. | 1.87 | 1.40 | 1.68 | 1.89 | 1.43 | |
| Eli Lilly & Co. | 1.58 | 1.15 | 0.94 | 1.05 | 1.23 | |
| Gilead Sciences Inc. | 1.55 | 1.60 | 1.43 | 1.29 | 1.27 | |
| Johnson & Johnson | 1.03 | 1.11 | 1.16 | 0.99 | 1.35 | |
| Merck & Co. Inc. | 1.54 | 1.36 | 1.25 | 1.47 | 1.27 | |
| Pfizer Inc. | 1.16 | 1.17 | 0.91 | 1.22 | 1.40 | |
| Regeneron Pharmaceuticals Inc. | 4.13 | 4.73 | 5.69 | 5.06 | 3.56 | |
| Thermo Fisher Scientific Inc. | 1.89 | 1.66 | 1.75 | 1.48 | 1.50 | |
| Current Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.30 | 1.24 | 1.27 | 1.30 | 1.36 | |
| Current Ratio, Industry | ||||||
| Health Care | 1.23 | 1.21 | 1.23 | 1.23 | 1.31 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 11,201,000 ÷ 3,861,200 = 2.90
2 Click competitor name to see calculations.
The current ratio exhibited fluctuating behavior over the five-year period. Initially, the ratio demonstrated an increasing trend, followed by a substantial decline and a slight recovery.
- Overall Trend
- The current ratio increased from 4.46 in 2021 to 4.83 in 2022, indicating strengthening short-term liquidity. However, this was followed by a decrease to 3.99 in 2023 and a more pronounced drop to 2.69 in 2024. A modest increase to 2.90 was observed in 2025, but the ratio remained significantly lower than its levels in 2021 and 2022.
- Year-over-Year Changes
- The largest year-over-year increase occurred between 2021 and 2022, with a change of 0.37. The most significant decline was between 2023 and 2024, decreasing by 1.30. The change from 2024 to 2025 was a smaller increase of 0.21.
- Underlying Components
- Current assets increased from 2021 to 2022 and 2023, but decreased significantly in 2024 and experienced a moderate increase in 2025. Current liabilities consistently increased throughout the period, though at a slower rate than the initial growth in current assets. The combined effect of these changes contributed to the observed fluctuations in the current ratio.
The decline in the current ratio from 2023 to 2024 warrants further investigation, as it suggests a potential weakening in the company’s ability to meet its short-term obligations. While the slight recovery in 2025 is positive, the ratio remains below previous levels.
Quick Ratio
Vertex Pharmaceuticals Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 5,084,800) | 4,569,600) | 10,369,100) | 10,504,000) | 6,795,000) | |
| Marketable securities | 1,523,300) | 1,546,300) | 849,200) | 274,500) | 729,900) | |
| Accounts receivable, net | 2,052,800) | 1,609,400) | 1,563,400) | 1,442,200) | 1,136,800) | |
| Total quick assets | 8,660,900) | 7,725,300) | 12,781,700) | 12,220,700) | 8,661,700) | |
| Current liabilities | 3,861,200) | 3,564,600) | 3,547,400) | 2,742,100) | 2,142,000) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 2.24 | 2.17 | 3.60 | 4.46 | 4.04 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.41 | 0.43 | 0.63 | 0.69 | 0.56 | |
| Amgen Inc. | 0.73 | 0.81 | 0.99 | 0.95 | 1.06 | |
| Bristol-Myers Squibb Co. | 0.94 | 0.91 | 1.04 | 0.87 | 1.20 | |
| Danaher Corp. | 1.25 | 0.83 | 1.18 | 1.30 | 0.89 | |
| Eli Lilly & Co. | 0.78 | 0.58 | 0.52 | 0.62 | 0.79 | |
| Gilead Sciences Inc. | 1.06 | 1.20 | 1.06 | 0.99 | 0.95 | |
| Johnson & Johnson | 0.69 | 0.78 | 0.82 | 0.71 | 1.04 | |
| Merck & Co. Inc. | 0.93 | 0.84 | 0.68 | 0.93 | 0.73 | |
| Pfizer Inc. | 0.69 | 0.74 | 0.50 | 0.80 | 1.00 | |
| Regeneron Pharmaceuticals Inc. | 3.28 | 3.86 | 4.82 | 4.16 | 2.98 | |
| Thermo Fisher Scientific Inc. | 1.36 | 1.14 | 1.27 | 1.06 | 1.00 | |
| Quick Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.83 | 0.82 | 0.85 | 0.91 | 0.98 | |
| Quick Ratio, Industry | ||||||
| Health Care | 0.88 | 0.88 | 0.90 | 0.93 | 1.00 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 8,660,900 ÷ 3,861,200 = 2.24
2 Click competitor name to see calculations.
The quick ratio exhibited a fluctuating pattern over the five-year period. Initially, the ratio demonstrated strength, followed by a decline and subsequent stabilization.
- Overall Trend
- The quick ratio began at 4.04 in 2021 and increased to a peak of 4.46 in 2022. A subsequent decrease was observed in 2023, falling to 3.60. This downward trend continued into 2024, with a more substantial decline to 2.17. The ratio showed a slight recovery in 2025, reaching 2.24.
- Quick Asset Evolution
- Total quick assets increased from US$8,661.7 million in 2021 to US$12,220.7 million in 2022, and further to US$12,781.7 million in 2023. A significant reduction occurred in 2024, with quick assets decreasing to US$7,725.3 million. This level was marginally improved in 2025, rising to US$8,660.9 million.
- Current Liability Evolution
- Current liabilities consistently increased throughout the period. From US$2,142.0 million in 2021, they rose to US$2,742.1 million in 2022, US$3,547.4 million in 2023, and US$3,564.6 million in 2024. The upward trend continued into 2025, reaching US$3,861.2 million.
- Ratio Dynamics
- The initial increase in the quick ratio in 2022 was driven by a larger percentage increase in quick assets compared to current liabilities. The subsequent decline in the ratio from 2023 onwards was primarily attributable to the substantial decrease in quick assets, coupled with the continued growth in current liabilities. The slight improvement in 2025 suggests a moderation of the decline, but the ratio remains considerably lower than its levels in 2021 and 2022.
The observed changes suggest a shifting liquidity profile, with a notable reduction in the company’s ability to meet short-term obligations with its most liquid assets in recent years.
Cash Ratio
Vertex Pharmaceuticals Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 5,084,800) | 4,569,600) | 10,369,100) | 10,504,000) | 6,795,000) | |
| Marketable securities | 1,523,300) | 1,546,300) | 849,200) | 274,500) | 729,900) | |
| Total cash assets | 6,608,100) | 6,115,900) | 11,218,300) | 10,778,500) | 7,524,900) | |
| Current liabilities | 3,861,200) | 3,564,600) | 3,547,400) | 2,742,100) | 2,142,000) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 1.71 | 1.72 | 3.16 | 3.93 | 3.51 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.12 | 0.14 | 0.34 | 0.31 | 0.28 | |
| Amgen Inc. | 0.36 | 0.52 | 0.60 | 0.59 | 0.66 | |
| Bristol-Myers Squibb Co. | 0.46 | 0.46 | 0.55 | 0.42 | 0.78 | |
| Danaher Corp. | 0.68 | 0.31 | 0.71 | 0.71 | 0.32 | |
| Eli Lilly & Co. | 0.21 | 0.12 | 0.10 | 0.12 | 0.25 | |
| Gilead Sciences Inc. | 0.65 | 0.83 | 0.64 | 0.57 | 0.56 | |
| Johnson & Johnson | 0.37 | 0.49 | 0.50 | 0.42 | 0.70 | |
| Merck & Co. Inc. | 0.51 | 0.48 | 0.28 | 0.54 | 0.34 | |
| Pfizer Inc. | 0.37 | 0.48 | 0.27 | 0.54 | 0.73 | |
| Regeneron Pharmaceuticals Inc. | 1.97 | 2.28 | 3.17 | 2.46 | 1.45 | |
| Thermo Fisher Scientific Inc. | 0.67 | 0.42 | 0.58 | 0.50 | 0.33 | |
| Cash Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.41 | 0.45 | 0.47 | 0.52 | 0.58 | |
| Cash Ratio, Industry | ||||||
| Health Care | 0.43 | 0.46 | 0.50 | 0.54 | 0.60 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 6,608,100 ÷ 3,861,200 = 1.71
2 Click competitor name to see calculations.
The cash ratio exhibited fluctuations over the five-year period. Initially, the ratio demonstrated growth, followed by a substantial decline and subsequent stabilization at a lower level.
- Cash Ratio Trend
- The cash ratio increased from 3.51 in 2021 to 3.93 in 2022, indicating an improved ability to cover current liabilities with immediately available cash. A subsequent decrease to 3.16 was observed in 2023. A more pronounced decline occurred between 2023 and 2024, with the ratio falling to 1.72. The ratio remained relatively stable in 2025 at 1.71.
- Total Cash Assets
- Total cash assets increased significantly from 2021 to 2022, rising from US$7,524,900 thousand to US$10,778,500 thousand. A modest increase was seen in 2023, reaching US$11,218,300 thousand. However, a substantial decrease in cash assets occurred between 2023 and 2024, dropping to US$6,115,900 thousand. Cash assets experienced a slight recovery in 2025, reaching US$6,608,100 thousand, but remained below the levels observed in prior years.
- Current Liabilities
- Current liabilities consistently increased throughout the period. From US$2,142,000 thousand in 2021, they rose to US$2,742,100 thousand in 2022, US$3,547,400 thousand in 2023, and continued to US$3,564,600 thousand in 2024. The upward trend persisted into 2025, with current liabilities reaching US$3,861,200 thousand.
The combined effect of decreasing cash assets and increasing current liabilities contributed to the observed decline in the cash ratio from 2023 onwards. While the ratio stabilized in the most recent year, it remains considerably lower than its levels in 2021 and 2022.