Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
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Long-term Activity Ratios (Summary)
Vertex Pharmaceuticals Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
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).
An examination of long-term investment activity ratios reveals varying trends over the five-year period. Generally, efficiency metrics demonstrate fluctuations, with some indicators suggesting improving asset utilization initially, followed by a potential softening in later years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited an increasing trend from 2021 to 2023, rising from 6.92 to 8.51. This indicates improving efficiency in generating revenue from fixed assets. However, a decline is observed in 2024 and 2025, with the ratio decreasing to 7.89, suggesting a potential decrease in the effectiveness of fixed assets in generating sales during those periods.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- When considering operating leases and right-of-use assets, the net fixed asset turnover ratio also increased from 2021 to 2023, moving from 5.32 to 6.79. This suggests that including these assets initially improved the overall asset turnover picture. However, a more pronounced decrease is evident in 2024 and 2025, falling to 3.89. This substantial decline indicates a significant reduction in revenue generated per dollar of net fixed assets, including those related to operating leases.
- Total Asset Turnover
- The total asset turnover ratio experienced a decrease from 0.56 in 2021 to 0.43 in 2023, indicating a diminishing ability to generate sales from all assets. A slight recovery to 0.49 is noted in 2024, followed by a further decrease to 0.47 in 2025. This suggests that while there was a minor improvement in 2024, the overall trend remains downward, implying a less efficient utilization of the company’s total asset base.
- Equity Turnover
- The equity turnover ratio decreased from 0.75 in 2021 to 0.56 in 2023, suggesting a reduced ability to generate sales from shareholder equity. An increase to 0.67 is observed in 2024, but this is followed by a decrease to 0.64 in 2025. This indicates some volatility but an overall trend of relatively stable, though somewhat diminished, sales generation relative to equity.
In summary, while initial years showed improvements in asset utilization, particularly concerning net fixed assets, the latter part of the period demonstrates a weakening trend in several key investment activity ratios. This warrants further investigation to understand the underlying causes of these shifts and their potential implications.
Net Fixed Asset Turnover
Vertex Pharmaceuticals Inc., net fixed asset turnover 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) | ||||||
| Revenues | ||||||
| Property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | ||||||
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
Net fixed asset turnover = Revenues ÷ Property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio demonstrates a generally positive trend from 2021 to 2024, followed by a decline in the most recent year. This ratio indicates the efficiency with which the company generates revenue from its fixed assets, specifically property and equipment.
- Overall Trend
- From 2021 to 2024, the net fixed asset turnover ratio increased consistently. This suggests improving efficiency in utilizing fixed assets to generate sales during this period. However, 2025 shows a decrease, indicating a potential reduction in efficiency.
- Detailed Analysis (2021-2024)
- In 2021, the ratio stood at 6.92. It rose to 8.06 in 2022, representing a substantial increase. This upward momentum continued with values of 8.51 in 2023 and 8.98 in 2024. These increases suggest the company was becoming increasingly effective at leveraging its fixed assets to drive revenue growth.
- Detailed Analysis (2025)
- The ratio decreased to 7.89 in 2025. While still above the 2021 level, this represents a notable decline from the peak in 2024. This decrease could be attributed to several factors, including an increase in fixed assets without a proportional increase in revenue, or a slowdown in revenue growth.
- Revenue and Fixed Asset Relationship
- Revenues increased consistently from 2021 to 2025. However, the rate of increase in property and equipment, net, accelerated in 2025. This suggests that the decrease in the net fixed asset turnover ratio in 2025 may be linked to a larger investment in fixed assets relative to the revenue generated.
Further investigation would be required to determine the underlying causes of the 2025 decline and assess whether it represents a temporary fluctuation or a more significant shift in the company’s operational efficiency.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Vertex Pharmaceuticals Inc., net fixed asset turnover (including operating lease, right-of-use asset) 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) | ||||||
| Revenues | ||||||
| Property and equipment, net | ||||||
| Operating lease assets | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | ||||||
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
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals a fluctuating pattern in the net fixed asset turnover ratio over the five-year period. Revenues demonstrate a consistent upward trend, while the value of property and equipment, net of accumulated depreciation and including operating lease right-of-use assets, initially remained relatively stable before experiencing significant growth in later years. This interplay impacts the observed turnover ratio.
- Revenue Trend
- Revenues increased steadily from US$7,574.4 million in 2021 to US$12,001.3 million in 2025. This represents a substantial overall increase, indicating strong sales performance throughout the period.
- Fixed Asset Value Trend
- The net value of property and equipment remained relatively consistent between 2021 and 2023, fluctuating around US$1.45 billion. A significant increase is then observed, rising to US$2,584.6 million in 2024 and further to US$3,083.0 million in 2025. This suggests substantial investment in fixed assets during these later years.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio increased from 5.32 in 2021 to 6.79 in 2023, indicating improving efficiency in generating revenue from fixed assets. However, the ratio then declined to 4.26 in 2024 and further to 3.89 in 2025. This decrease coincides with the substantial increase in fixed asset value, suggesting that the revenue growth did not keep pace with the investment in property and equipment. The initial increase in the ratio suggests effective asset utilization, while the subsequent decline indicates a potential slowdown in the efficiency of generating revenue from the expanded asset base.
In summary, while revenue consistently increased, the efficiency with which fixed assets generated revenue decreased in the latter part of the period. This warrants further investigation to determine the reasons for the declining turnover ratio, such as potential underutilization of new assets or a lag in realizing the full revenue potential of recent investments.
Total Asset Turnover
Vertex Pharmaceuticals Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Total Asset Turnover, Industry | ||||||
| Health Care | ||||||
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
Total asset turnover = Revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The total asset turnover ratio demonstrates a fluctuating pattern over the five-year period. Initially, the ratio decreased from 0.56 in 2021 to 0.43 in 2023, indicating a diminishing efficiency in generating revenue from its asset base. However, a slight recovery is observed in subsequent years, with the ratio increasing to 0.49 in 2024 and remaining relatively stable at 0.47 in 2025.
- Total Asset Turnover Trend
- A clear downward trend is evident from 2021 to 2023. This suggests the company was becoming less effective at utilizing its assets to generate sales. The subsequent stabilization and modest increase in 2024 and 2025 may indicate a potential stabilization of asset utilization, though it remains below the level observed in 2021.
The decrease in the ratio from 2021 to 2023 coincides with a substantial increase in total assets, while revenue growth, though positive, did not keep pace with the asset expansion. This suggests the company may have been investing in assets that did not immediately translate into proportional revenue gains. The leveling off of the ratio in the later years suggests a more balanced relationship between asset growth and revenue generation, but further investigation would be needed to determine the underlying causes of these changes.
- Revenue and Asset Relationship
- Revenues increased consistently throughout the period, but the rate of asset accumulation exceeded the rate of revenue growth between 2021 and 2023. This disparity contributed to the declining asset turnover ratio. The more comparable growth rates in 2024 and 2025 likely explain the ratio’s stabilization.
The ratio of 0.47 in 2025, while an improvement from the low of 0.43 in 2023, still represents a lower level of asset utilization compared to 2021. Continued monitoring of this ratio is recommended to assess whether the company can further improve its efficiency in converting assets into revenue.
Equity Turnover
Vertex Pharmaceuticals Inc., equity turnover 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) | ||||||
| Revenues | ||||||
| Shareholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Equity Turnover, Industry | ||||||
| Health Care | ||||||
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
Equity turnover = Revenues ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The equity turnover ratio demonstrates a fluctuating pattern over the five-year period. Initially, the ratio decreased from 0.75 in 2021 to 0.56 in 2023, indicating a diminishing ability to generate revenue from shareholders’ equity. However, a subsequent increase to 0.67 was observed in 2024, followed by a slight decrease to 0.64 in 2025.
- Overall Trend
- While exhibiting volatility, the equity turnover ratio generally remained within a relatively narrow range between 0.56 and 0.75. The initial decline suggests a potential decrease in the efficiency with which equity was utilized to generate sales, but the recovery in 2024 indicates a partial reversal of this trend. The stabilization around 0.64 in the latest year suggests a potential plateau.
- Year-over-Year Changes
- The most significant decrease occurred between 2021 and 2023, with a drop of 19 basis points. This coincided with a period of substantial growth in shareholders’ equity, which outpaced revenue growth. The increase from 2023 to 2024, representing a 11 basis point rise, suggests improved efficiency in utilizing equity to generate revenue. The minor decrease from 2024 to 2025 indicates a slight reduction in this efficiency.
- Relationship to Revenue and Equity
- Revenues consistently increased throughout the period, while shareholders’ equity experienced growth, a temporary decline, and then further growth. The equity turnover ratio’s fluctuations appear to be influenced by the relative growth rates of these two components. When equity growth exceeded revenue growth, the ratio decreased, and vice versa. The ratio’s stabilization in the most recent years suggests a more balanced relationship between revenue and equity expansion.
In conclusion, the equity turnover ratio indicates a dynamic relationship between revenue generation and equity investment. While a decreasing trend was initially observed, the ratio demonstrated some recovery and stabilization in later years, suggesting a potential shift in the company’s operational efficiency.