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.
Long-term Activity Ratios (Summary)
Vertex Pharmaceuticals Inc., long-term (investment) activity ratios
Based on: 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), 10-K (reporting date: 2020-12-31).
- Net fixed asset turnover
- The net fixed asset turnover ratio shows a consistent upward trend over the five-year period. It increased steadily from 6.47 in 2020 to 8.98 in 2024, indicating improving efficiency in utilizing fixed assets to generate sales.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- This ratio also displayed an overall increasing trend from 4.83 in 2020 to a peak of 6.79 in 2023. However, it then declined sharply to 4.26 in 2024. This suggests some recent challenges or changes in the management or utilization of leased assets.
- Total asset turnover
- Total asset turnover exhibited a different pattern, with a slight increase from 0.53 in 2020 to 0.56 in 2021, followed by a decline to 0.43 in 2023 before recovering partially to 0.49 in 2024. The overall trend shows some volatility and a modest deterioration compared to the start of the period, implying fluctuating asset utilization efficiency.
- Equity turnover
- Equity turnover decreased from 0.71 in 2020 to 0.56 in 2023, before rising again to 0.67 in 2024. This indicates variability in how effectively equity was used to generate revenue, with a downward trend in the middle years followed by some improvement towards the end.
Net Fixed Asset Turnover
Vertex Pharmaceuticals Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 11,020,100) | 9,869,200) | 8,930,700) | 7,574,400) | 6,205,683) | |
| Property and equipment, net | 1,227,800) | 1,159,300) | 1,108,400) | 1,094,100) | 958,534) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 8.98 | 8.51 | 8.06 | 6.92 | 6.47 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | 10.97 | 10.89 | 11.76 | 11.00 | 8.73 | |
| Amgen Inc. | 4.89 | 4.53 | 4.57 | 4.69 | 4.96 | |
| Bristol-Myers Squibb Co. | 6.77 | 6.77 | 7.38 | 7.67 | 7.22 | |
| Danaher Corp. | 4.78 | 5.25 | 7.96 | 7.77 | 6.83 | |
| Eli Lilly & Co. | 2.63 | 2.64 | 2.81 | 3.15 | 2.83 | |
| Gilead Sciences Inc. | 5.28 | 5.07 | 4.93 | 5.27 | 4.90 | |
| Johnson & Johnson | 4.33 | 4.28 | 4.79 | 4.95 | 4.40 | |
| Merck & Co. Inc. | 2.70 | 2.61 | 2.77 | 2.53 | 2.67 | |
| Pfizer Inc. | 3.46 | 3.14 | 6.22 | 5.52 | 3.07 | |
| Regeneron Pharmaceuticals Inc. | 3.09 | 3.16 | 3.23 | 4.62 | 2.64 | |
| Thermo Fisher Scientific Inc. | 4.61 | 4.54 | 4.84 | 4.71 | 5.45 | |
| Net Fixed Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 4.18 | 4.12 | 4.98 | 4.98 | 4.31 | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 8.88 | 8.80 | 9.32 | 9.09 | 8.34 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover = Revenues ÷ Property and equipment, net
= 11,020,100 ÷ 1,227,800 = 8.98
2 Click competitor name to see calculations.
The financial data reveals a consistent upward trend in key performance indicators over the observed five-year period.
- Revenues
- Revenues increased steadily from US$ 6,205,683 thousand in 2020 to US$ 11,020,100 thousand in 2024. This represents a robust growth trajectory, with annual increments reflecting sustained business expansion and possibly increasing market demand or product penetration.
- Property and Equipment, Net
- The net value of property and equipment also exhibited a gradual rise, moving from US$ 958,534 thousand in 2020 to US$ 1,227,800 thousand in 2024. Although growth here is more moderate compared to revenues, it indicates ongoing investment in physical assets, supporting the company’s operational capacity and production capability.
- Net Fixed Asset Turnover
- This ratio, which measures the efficiency in using fixed assets to generate sales, improved notably from 6.47 in 2020 to 8.98 in 2024. The increasing trend implies enhanced asset utilization, suggesting that the company is generating more revenue per unit of fixed asset over time. This improvement enhances overall operational efficiency and may contribute to competitive advantage.
Overall, the upward trends in revenues, asset base, and asset efficiency collectively indicate positive operational and financial performance, underscoring effective management strategies in asset deployment and revenue generation.
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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 11,020,100) | 9,869,200) | 8,930,700) | 7,574,400) | 6,205,683) | |
| Property and equipment, net | 1,227,800) | 1,159,300) | 1,108,400) | 1,094,100) | 958,534) | |
| Operating lease assets | 1,356,800) | 293,600) | 347,400) | 330,300) | 325,564) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 2,584,600) | 1,452,900) | 1,455,800) | 1,424,400) | 1,284,098) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 4.26 | 6.79 | 6.13 | 5.32 | 4.83 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| AbbVie Inc. | 9.62 | 9.47 | 10.24 | 9.57 | 7.46 | |
| Amgen Inc. | 4.51 | 4.08 | 4.13 | 4.23 | 4.58 | |
| Bristol-Myers Squibb Co. | 5.78 | 5.60 | 6.18 | 6.66 | 6.30 | |
| Danaher Corp. | 3.93 | 4.26 | 6.35 | 6.10 | 5.30 | |
| Eli Lilly & Co. | 2.48 | 2.45 | 2.63 | 2.93 | 2.63 | |
| Gilead Sciences Inc. | 4.83 | 4.57 | 4.51 | 4.77 | 4.34 | |
| Johnson & Johnson | 4.11 | 4.07 | 4.54 | 4.72 | 4.18 | |
| Merck & Co. Inc. | 2.55 | 2.45 | 2.60 | 2.33 | 2.43 | |
| Pfizer Inc. | 3.08 | 2.72 | 5.25 | 4.64 | 2.79 | |
| Regeneron Pharmaceuticals Inc. | 2.95 | 3.11 | 3.17 | 4.52 | 2.58 | |
| Thermo Fisher Scientific Inc. | 3.97 | 3.89 | 4.13 | 3.98 | 4.82 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 3.78 | 3.71 | 4.48 | 4.45 | 3.91 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 7.33 | 7.17 | 7.48 | 7.17 | 6.51 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 11,020,100 ÷ 2,584,600 = 4.26
2 Click competitor name to see calculations.
- Revenues
- The revenues demonstrate a consistent upward trend over the five-year period. Starting at approximately $6.21 billion in 2020, revenues increased annually to reach about $11.02 billion in 2024. This indicates significant growth in the company's sales or service income, with a steady rise each year reflecting possible expansion or successful market penetration.
- Property and Equipment, Net
- The net value of property and equipment, including operating lease right-of-use assets, showed moderate growth from 2020 to 2023, increasing from roughly $1.28 billion to $1.45 billion. However, there is a marked increase in 2024, where the value jumps to approximately $2.58 billion. This sharp rise suggests a substantial investment or acquisition in fixed assets or leased assets during the most recent period.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which measures how efficiently the company utilizes its fixed assets to generate revenue, increased steadily from 4.83 in 2020 to a peak of 6.79 in 2023. This upward movement indicates improved efficiency in asset use relative to revenue generation. However, in 2024, this ratio declines to 4.26, which may be a consequence of the significant increase in property and equipment value outpacing revenue growth. This suggests that while assets increased substantially, revenue growth did not keep pace proportionally, leading to reduced asset turnover efficiency in the latest period.
Total Asset Turnover
Vertex Pharmaceuticals Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 11,020,100) | 9,869,200) | 8,930,700) | 7,574,400) | 6,205,683) | |
| Total assets | 22,533,200) | 22,730,200) | 18,150,900) | 13,432,500) | 11,751,808) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.49 | 0.43 | 0.49 | 0.56 | 0.53 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | 0.42 | 0.40 | 0.42 | 0.38 | 0.30 | |
| Amgen Inc. | 0.35 | 0.28 | 0.38 | 0.40 | 0.39 | |
| Bristol-Myers Squibb Co. | 0.52 | 0.47 | 0.48 | 0.42 | 0.36 | |
| Danaher Corp. | 0.31 | 0.28 | 0.37 | 0.35 | 0.29 | |
| Eli Lilly & Co. | 0.57 | 0.53 | 0.58 | 0.58 | 0.53 | |
| Gilead Sciences Inc. | 0.48 | 0.43 | 0.43 | 0.40 | 0.36 | |
| Johnson & Johnson | 0.49 | 0.51 | 0.51 | 0.52 | 0.47 | |
| Merck & Co. Inc. | 0.55 | 0.56 | 0.54 | 0.46 | 0.52 | |
| Pfizer Inc. | 0.30 | 0.26 | 0.51 | 0.45 | 0.28 | |
| Regeneron Pharmaceuticals Inc. | 0.38 | 0.40 | 0.42 | 0.63 | 0.50 | |
| Thermo Fisher Scientific Inc. | 0.44 | 0.43 | 0.46 | 0.41 | 0.47 | |
| Total Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.43 | 0.40 | 0.47 | 0.45 | 0.39 | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.75 | 0.73 | 0.75 | 0.70 | 0.64 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Total asset turnover = Revenues ÷ Total assets
= 11,020,100 ÷ 22,533,200 = 0.49
2 Click competitor name to see calculations.
- Revenues
- Revenues have shown a consistent upward trend over the five-year period. Starting at approximately 6.21 billion USD in 2020, revenues increased steadily each year, reaching about 11.02 billion USD by 2024. This represents a substantial growth of nearly 78% over the five years, indicating strong sales performance and revenue generation capability.
- Total Assets
- Total assets have also increased progressively from approximately 11.75 billion USD in 2020 to 22.53 billion USD in 2024. There is a notable acceleration in asset growth between 2021 and 2023, where assets jumped from around 13.43 billion to 22.73 billion USD, reflecting significant investment or asset acquisition during these years. Slight contraction is observed from 2023 to 2024, with a marginal decrease in total assets.
- Total Asset Turnover
- The total asset turnover ratio reveals the efficiency of the company in using its assets to generate revenues. It started at 0.53 in 2020, slightly increased to 0.56 in 2021, then declined to 0.49 in 2022, dropped further to 0.43 in 2023, before recovering slightly to 0.49 in 2024. The declining trend from 2021 onwards suggests that asset utilization efficiency decreased as the asset base grew faster than revenues. The partial recovery in 2024 indicates some improvement but remains below the earlier high point.
- Overall Analysis
- The financial data indicates robust revenue growth accompanied by rapid asset expansion. However, declining asset turnover ratios imply that the increase in assets has outpaced revenue growth in recent years, which may indicate potential inefficiencies in asset deployment or strategic shifts involving asset-heavy investments. Monitoring future asset utilization and ensuring that asset growth contributes proportionally to revenue gains will be essential for maintaining operational efficiency.
Equity Turnover
Vertex Pharmaceuticals Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 11,020,100) | 9,869,200) | 8,930,700) | 7,574,400) | 6,205,683) | |
| Shareholders’ equity | 16,409,600) | 17,580,400) | 13,912,700) | 10,100,000) | 8,686,815) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.67 | 0.56 | 0.64 | 0.75 | 0.71 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| AbbVie Inc. | 16.94 | 5.24 | 3.36 | 3.65 | 3.50 | |
| Amgen Inc. | 5.45 | 4.32 | 6.77 | 3.63 | 2.58 | |
| Bristol-Myers Squibb Co. | 2.96 | 1.53 | 1.49 | 1.29 | 1.12 | |
| Danaher Corp. | 0.48 | 0.45 | 0.63 | 0.65 | 0.56 | |
| Eli Lilly & Co. | 3.17 | 3.17 | 2.68 | 3.15 | 4.35 | |
| Gilead Sciences Inc. | 1.48 | 1.18 | 1.27 | 1.28 | 1.34 | |
| Johnson & Johnson | 1.24 | 1.24 | 1.24 | 1.27 | 1.31 | |
| Merck & Co. Inc. | 1.39 | 1.60 | 1.29 | 1.28 | 1.90 | |
| Pfizer Inc. | 0.72 | 0.67 | 1.06 | 1.06 | 0.67 | |
| Regeneron Pharmaceuticals Inc. | 0.48 | 0.51 | 0.54 | 0.86 | 0.77 | |
| Thermo Fisher Scientific Inc. | 0.86 | 0.92 | 1.02 | 0.96 | 0.93 | |
| Equity Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.27 | 1.15 | 1.24 | 1.27 | 1.22 | |
| Equity Turnover, Industry | ||||||
| Health Care | 2.10 | 2.00 | 1.97 | 1.91 | 1.89 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Equity turnover = Revenues ÷ Shareholders’ equity
= 11,020,100 ÷ 16,409,600 = 0.67
2 Click competitor name to see calculations.
- Revenues
- There is a consistent upward trend in revenues over the observed period. Starting from approximately 6.21 billion US dollars in 2020, revenues increased steadily each year, reaching over 11 billion US dollars by the end of 2024. The growth rate appears robust, indicating expanding business operations or market demand.
- Shareholders’ Equity
- Shareholders’ equity shows a significant increase from about 8.69 billion US dollars in 2020 to a peak near 17.58 billion US dollars in 2023. However, there is a decline in 2024, where equity decreases to approximately 16.41 billion US dollars. Despite this slight reduction at the end, the overall trend over the five years is strongly positive, suggesting accumulated retained earnings, capital injections, or revaluation gains up to 2023, with some correction or distribution in the final year.
- Equity Turnover
- The equity turnover ratio exhibits a fluctuating pattern across the period. It rises slightly from 0.71 in 2020 to 0.75 in 2021, then declines in the subsequent years to a low of 0.56 in 2023 before partially recovering to 0.67 in 2024. This suggests that the company’s efficiency in generating revenues from shareholders’ equity weakened between 2021 and 2023 but improved in the last year observed, though it did not return to the earlier peak level. The fluctuations may reflect changes in asset utilization or capital structure dynamics.