Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Analysis of Short-term (Operating) Activity Ratios

Beginner level

Short-term Activity Ratios (Summary)

Vertex Pharmaceuticals Inc., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Turnover Ratios
Inventory turnover 2.62 3.27 3.29 2.46 2.71
Receivables turnover 7.01 6.57 7.44 8.85 8.47
Payables turnover 4.75 6.25 3.69 3.72 3.42
Working capital turnover 0.99 1.19 1.12 1.35 1.64
Average No. Days
Average inventory processing period 139 112 111 148 135
Add: Average receivable collection period 52 56 49 41 43
Operating cycle 191 168 160 189 178
Less: Average payables payment period 77 58 99 98 107
Cash conversion cycle 114 110 61 91 71

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).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Vertex Pharmaceuticals Inc.’s inventory turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Receivables turnover An activity ratio equal to revenue divided by receivables. Vertex Pharmaceuticals Inc.’s receivables turnover ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Vertex Pharmaceuticals Inc.’s payables turnover ratio increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Vertex Pharmaceuticals Inc.’s working capital turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Vertex Pharmaceuticals Inc.’s number of days of inventory outstanding deteriorated from 2018 to 2019 and from 2019 to 2020.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Vertex Pharmaceuticals Inc.’s number of days of receivables outstanding deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Vertex Pharmaceuticals Inc.’s operating cycle deteriorated from 2018 to 2019 and from 2019 to 2020.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Vertex Pharmaceuticals Inc.’s number of days of payables outstanding decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Vertex Pharmaceuticals Inc.’s cash conversion cycle deteriorated from 2018 to 2019 and from 2019 to 2020.

Inventory Turnover

Vertex Pharmaceuticals Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Cost of sales 736,300  547,758  409,539  275,119  210,460 
Inventories 280,777  167,502  124,360  111,830  77,604 
Short-term Activity Ratio
Inventory turnover1 2.62 3.27 3.29 2.46 2.71
Benchmarks
Inventory Turnover, Competitors2
Abbott Laboratories 2.99 3.07 3.35 3.43 3.71
AbbVie Inc. 4.65 4.10 4.81 4.39 4.04
Amgen Inc. 1.58 1.22 1.39 1.44 1.52
Bristol-Myers Squibb Co. 5.68 1.88 5.48 5.20 3.99
Eli Lilly & Co. 1.38 1.48 1.56 1.36 1.59
Gilead Sciences Inc. 5.07 5.96 5.46 2.68
Illumina Inc. 2.78 3.00 2.68 2.78 2.44
Johnson & Johnson 3.04 3.05 3.15 2.89 2.66
Merck & Co. Inc. 2.45 2.36 2.48 2.51 2.85
Pfizer Inc. 1.08 1.23 1.50 1.48 1.82
Regeneron Pharmaceuticals Inc. 0.26 0.26 0.16 0.28 0.49
Zoetis Inc. 1.26 1.41 1.37 1.24 1.11
Inventory Turnover, Sector
Pharmaceuticals & Biotechnology 2.20 2.50 2.40 2.41
Inventory Turnover, Industry
Health Care 5.37 5.80 5.50 5.59

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
Inventory turnover = Cost of sales ÷ Inventories
= 736,300 ÷ 280,777 = 2.62

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Vertex Pharmaceuticals Inc.’s inventory turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Receivables Turnover

Vertex Pharmaceuticals Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Revenues 6,205,683  4,162,821  3,047,597  2,488,652  1,702,177 
Accounts receivable, net 885,352  633,518  409,688  281,343  201,083 
Short-term Activity Ratio
Receivables turnover1 7.01 6.57 7.44 8.85 8.47
Benchmarks
Receivables Turnover, Competitors2
Abbott Laboratories 5.40 5.88 5.90 5.22 6.42
AbbVie Inc. 5.19 6.13 6.08 5.55 5.39
Amgen Inc. 5.36 5.47 6.29 6.73 6.92
Bristol-Myers Squibb Co. 5.72 3.89 4.66 4.43 4.69
Eli Lilly & Co. 4.18 4.91 4.68 5.03 5.27
Gilead Sciences Inc. 6.18 6.52 6.66 6.64
Illumina Inc. 6.65 6.18 6.48 6.70 6.29
Johnson & Johnson 6.08 5.67 5.79 5.67 6.14
Merck & Co. Inc. 6.11 6.91 5.98 5.84 5.67
Pfizer Inc. 5.28 5.93 6.68 6.39 6.42
Regeneron Pharmaceuticals Inc. 1.79 2.30 2.38 2.42 2.49
Zoetis Inc. 6.59 5.76 5.62 5.32 5.35
Receivables Turnover, Sector
Pharmaceuticals & Biotechnology 5.58 5.77 5.65 5.90
Receivables Turnover, Industry
Health Care 7.39 7.49 7.32 7.59

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
Receivables turnover = Revenues ÷ Accounts receivable, net
= 6,205,683 ÷ 885,352 = 7.01

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Vertex Pharmaceuticals Inc.’s receivables turnover ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level.

Payables Turnover

Vertex Pharmaceuticals Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Cost of sales 736,300  547,758  409,539  275,119  210,460 
Accounts payable 155,139  87,610  110,987  73,994  61,451 
Short-term Activity Ratio
Payables turnover1 4.75 6.25 3.69 3.72 3.42
Benchmarks
Payables Turnover, Competitors2
Abbott Laboratories 3.80 4.07 4.27 5.14 7.66
AbbVie Inc. 6.76 5.12 4.99 4.78 4.15
Amgen Inc. 4.33 3.18 3.40 3.01 4.54
Bristol-Myers Squibb Co. 4.34 3.30 3.46 2.70 2.97
Eli Lilly & Co. 3.41 3.36 4.55 4.30 4.19
Gilead Sciences Inc. 6.56 6.14 5.37 3.53
Illumina Inc. 5.40 7.22 5.61 5.79 5.31
Johnson & Johnson 2.99 3.23 3.59 3.47 3.13
Merck & Co. Inc. 3.37 3.78 4.07 4.12 4.95
Pfizer Inc. 2.02 2.42 2.41 2.41 2.72
Regeneron Pharmaceuticals Inc. 1.03 0.87 0.82 1.14 1.44
Zoetis Inc. 4.50 6.62 6.11 6.80 6.29
Payables Turnover, Sector
Pharmaceuticals & Biotechnology 3.50 3.73 3.64 3.75
Payables Turnover, Industry
Health Care 5.78 5.99 5.81 5.96

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
Payables turnover = Cost of sales ÷ Accounts payable
= 736,300 ÷ 155,139 = 4.75

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Vertex Pharmaceuticals Inc.’s payables turnover ratio increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.

Working Capital Turnover

Vertex Pharmaceuticals Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Current assets 8,133,379  4,822,829  3,843,109  2,648,963  1,831,540 
Less: Current liabilities 1,877,533  1,334,827  1,120,292  807,260  792,537 
Working capital 6,255,846  3,488,002  2,722,817  1,841,703  1,039,003 
 
Revenues 6,205,683  4,162,821  3,047,597  2,488,652  1,702,177 
Short-term Activity Ratio
Working capital turnover1 0.99 1.19 1.12 1.35 1.64
Benchmarks
Working Capital Turnover, Competitors2
Abbott Laboratories 4.06 6.64 5.44 2.44 1.04
AbbVie Inc. 0.98 6.16 4.00
Amgen Inc. 2.55 3.96 0.93 0.54 0.63
Bristol-Myers Squibb Co. 3.72 2.28 3.32 3.64 3.64
Eli Lilly & Co. 4.93 11.54 2.84 4.90 5.16
Gilead Sciences Inc. 1.08 0.86 1.27 2.67
Illumina Inc. 1.00 0.94 1.24 1.23 1.49
Johnson & Johnson 9.44 8.81 5.51 6.09 1.86
Merck & Co. Inc. 109.83 8.90 11.53 6.52 2.97
Pfizer Inc. 4.58 2.97 4.90 6.74
Regeneron Pharmaceuticals Inc. 0.79 0.86 0.82 1.16 1.72
Zoetis Inc. 1.50 2.13 1.83 1.70 2.15
Working Capital Turnover, Sector
Pharmaceuticals & Biotechnology 3.44 2.90 2.60 2.12
Working Capital Turnover, Industry
Health Care 5.24 5.18 4.28 3.70

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
Working capital turnover = Revenues ÷ Working capital
= 6,205,683 ÷ 6,255,846 = 0.99

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Vertex Pharmaceuticals Inc.’s working capital turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Average Inventory Processing Period

Vertex Pharmaceuticals Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Inventory turnover 2.62 3.27 3.29 2.46 2.71
Short-term Activity Ratio (no. days)
Average inventory processing period1 139 112 111 148 135
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Abbott Laboratories 122 119 109 107 98
AbbVie Inc. 79 89 76 83 90
Amgen Inc. 231 300 262 254 241
Bristol-Myers Squibb Co. 64 194 67 70 92
Eli Lilly & Co. 265 247 233 268 230
Gilead Sciences Inc. 72 61 67 136
Illumina Inc. 131 122 136 131 150
Johnson & Johnson 120 119 116 126 137
Merck & Co. Inc. 149 155 147 146 128
Pfizer Inc. 338 296 244 246 201
Regeneron Pharmaceuticals Inc. 1,422 1,426 2,334 1,309 749
Zoetis Inc. 289 258 266 293 329
Average Inventory Processing Period, Sector
Pharmaceuticals & Biotechnology 166 146 152 151
Average Inventory Processing Period, Industry
Health Care 68 63 66 65

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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.62 = 139

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Vertex Pharmaceuticals Inc.’s number of days of inventory outstanding deteriorated from 2018 to 2019 and from 2019 to 2020.

Average Receivable Collection Period

Vertex Pharmaceuticals Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Receivables turnover 7.01 6.57 7.44 8.85 8.47
Short-term Activity Ratio (no. days)
Average receivable collection period1 52 56 49 41 43
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Abbott Laboratories 68 62 62 70 57
AbbVie Inc. 70 60 60 66 68
Amgen Inc. 68 67 58 54 53
Bristol-Myers Squibb Co. 64 94 78 82 78
Eli Lilly & Co. 87 74 78 73 69
Gilead Sciences Inc. 59 56 55 55
Illumina Inc. 55 59 56 55 58
Johnson & Johnson 60 64 63 64 59
Merck & Co. Inc. 60 53 61 63 64
Pfizer Inc. 69 62 55 57 57
Regeneron Pharmaceuticals Inc. 204 159 153 151 147
Zoetis Inc. 55 63 65 69 68
Average Receivable Collection Period, Sector
Pharmaceuticals & Biotechnology 65 63 65 62
Average Receivable Collection Period, Industry
Health Care 49 49 50 48

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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 7.01 = 52

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Vertex Pharmaceuticals Inc.’s number of days of receivables outstanding deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level.

Operating Cycle

Vertex Pharmaceuticals Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Average inventory processing period 139 112 111 148 135
Average receivable collection period 52 56 49 41 43
Short-term Activity Ratio
Operating cycle1 191 168 160 189 178
Benchmarks
Operating Cycle, Competitors2
Abbott Laboratories 190 181 171 177 155
AbbVie Inc. 149 149 136 149 158
Amgen Inc. 299 367 320 308 294
Bristol-Myers Squibb Co. 128 288 145 152 170
Eli Lilly & Co. 352 321 311 341 299
Gilead Sciences Inc. 131 117 122 191
Illumina Inc. 186 181 192 186 208
Johnson & Johnson 180 183 179 190 196
Merck & Co. Inc. 209 208 208 209 192
Pfizer Inc. 407 358 299 303 258
Regeneron Pharmaceuticals Inc. 1,626 1,585 2,487 1,460 896
Zoetis Inc. 344 321 331 362 397
Operating Cycle, Sector
Pharmaceuticals & Biotechnology 231 209 217 213
Operating Cycle, Industry
Health Care 117 112 116 113

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
Operating cycle = Average inventory processing period + Average receivable collection period
= 139 + 52 = 191

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Vertex Pharmaceuticals Inc.’s operating cycle deteriorated from 2018 to 2019 and from 2019 to 2020.

Average Payables Payment Period

Vertex Pharmaceuticals Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Payables turnover 4.75 6.25 3.69 3.72 3.42
Short-term Activity Ratio (no. days)
Average payables payment period1 77 58 99 98 107
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Abbott Laboratories 96 90 85 71 48
AbbVie Inc. 54 71 73 76 88
Amgen Inc. 84 115 107 121 80
Bristol-Myers Squibb Co. 84 110 105 135 123
Eli Lilly & Co. 107 109 80 85 87
Gilead Sciences Inc. 56 59 68 103
Illumina Inc. 68 51 65 63 69
Johnson & Johnson 122 113 102 105 116
Merck & Co. Inc. 108 97 90 89 74
Pfizer Inc. 181 151 152 151 134
Regeneron Pharmaceuticals Inc. 353 421 442 321 253
Zoetis Inc. 81 55 60 54 58
Average Payables Payment Period, Sector
Pharmaceuticals & Biotechnology 104 98 100 97
Average Payables Payment Period, Industry
Health Care 63 61 63 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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 4.75 = 77

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Vertex Pharmaceuticals Inc.’s number of days of payables outstanding decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.

Cash Conversion Cycle

Vertex Pharmaceuticals Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Average inventory processing period 139 112 111 148 135
Average receivable collection period 52 56 49 41 43
Average payables payment period 77 58 99 98 107
Short-term Activity Ratio
Cash conversion cycle1 114 110 61 91 71
Benchmarks
Cash Conversion Cycle, Competitors2
Abbott Laboratories 94 91 86 106 107
AbbVie Inc. 95 78 63 73 70
Amgen Inc. 215 252 213 187 214
Bristol-Myers Squibb Co. 44 178 40 17 47
Eli Lilly & Co. 245 212 231 256 212
Gilead Sciences Inc. 75 58 54 88
Illumina Inc. 118 130 127 123 139
Johnson & Johnson 58 70 77 85 80
Merck & Co. Inc. 101 111 118 120 118
Pfizer Inc. 226 207 147 152 124
Regeneron Pharmaceuticals Inc. 1,273 1,164 2,045 1,139 643
Zoetis Inc. 263 266 271 308 339
Cash Conversion Cycle, Sector
Pharmaceuticals & Biotechnology 127 111 117 116
Cash Conversion Cycle, Industry
Health Care 54 51 53 52

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
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 139 + 5277 = 114

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Vertex Pharmaceuticals Inc.’s cash conversion cycle deteriorated from 2018 to 2019 and from 2019 to 2020.