Pfizer Inc. (NYSE:PFE)

The analysis of liquidity ratios over the examined quarters reveals fluctuating trends in Pfizer Inc.'s short-term financial health.

Current Ratio

The current ratio showed moderate variability, starting at 1.03 and reaching a peak of 2.38 in the quarter ending October 1, 2023. This indicates an improved ability to cover short-term liabilities with current assets during that period. However, a subsequent decline is observed, bottoming out at 0.86 by September 29, 2024, before slightly recovering to 1.16 at the last recorded quarter. The general trend suggests periods of strengthening liquidity followed by contractions, signaling changes in working capital dynamics.

Quick Ratio

The quick ratio exhibited a similar pattern, initially increasing from 0.6 to a peak of 1.78 in October 2023, indicating enhanced liquidity in terms of more liquid current assets relative to current liabilities. After this peak, the ratio decreased considerably, reaching a low of 0.42 in September 2024, before a partial rebound to 0.67 by the end of the dataset. These fluctuations may reflect adjustments in inventory or receivables management impacting near-cash asset levels.

Cash Ratio

The cash ratio rose from 0.31 to a high of 1.42 in October 2023, reflecting a substantial increase in cash and cash equivalents relative to current liabilities in that quarter. Following this peak, there was a marked decrease to 0.16 in September 2024, evidencing a contraction in immediate liquidity resources. The ratio later improved modestly to 0.35 in the last period, indicating some recovery but remaining below earlier highs. These substantial variations highlight significant shifts in cash management or short-term obligations over time.

In summary, the liquidity metrics collectively indicate that the company experienced heightened liquidity and short-term financial strength up until late 2023, with all ratios peaking around that time. Subsequently, there was a notable decline in liquidity across all measures through mid to late 2024, followed by modest recoveries. This pattern suggests dynamic management of current assets and liabilities, with potential implications for operational flexibility and risk exposure during the periods of reduced short-term liquidity.

The quarterly financial data reveals fluctuations in the liquidity position as reflected by current assets, current liabilities, and the current ratio over the periods analyzed.

Current Assets

Current assets exhibit volatility throughout the observed quarters. Starting at approximately $34.7 billion in early 2020, current assets rose significantly to peak near $73.3 billion by mid-2023, with intermittent dips notably around the end of 2022 and early 2024. The data show considerable increases in certain quarters, particularly from mid-2021 through 2023, suggesting inflows or accumulation of liquid resources during this period. However, the downward movements in late 2023 and parts of 2024 imply a reduction or reallocation of liquid assets.

Current Liabilities

Current liabilities display a similar pattern of fluctuation, starting close to $33.9 billion in early 2020, rising to a high near $47.8 billion at the end of 2023. The liabilities peaked notably during the fourth quarter of 2023 with a sharp increase, suggesting heightened short-term obligations or payables during that period. Following this peak, liabilities somewhat declined but remained elevated relative to their initial levels, indicating sustained short-term financial commitments.

Current Ratio

The current ratio, an indicator of short-term liquidity, varied between 0.86 and 2.38, indicating changing capability to cover short-term liabilities with current assets. The ratio generally stayed above 1.0 in most quarters, which denotes a healthy liquidity buffer. Noticeably, there were peaks in the ratio during mid-2023, reaching values above 2.0, signaling a strong liquidity position during that timeframe. Conversely, in late 2023 and early to mid-2024, the ratio fell below 1.0 on some occasions, implying potential liquidity pressures or tighter working capital management during those quarters.

Overall, the data show a dynamic liquidity environment with periods of robust asset accumulation and increased liabilities, reflecting changes in operational and financial strategies. The intervals of decreased current ratio below unity suggest episodes of possible liquidity constraints, warranting closer monitoring of short-term financial health going forward.

The analysis of the financial data reveals notable fluctuations in total quick assets, current liabilities, and the quick ratio over the observed periods.

Total Quick Assets

Total quick assets exhibit considerable variability across quarters. Starting at 20,231 million US dollars in March 2020, the figure rose to peaks above 50,000 million in late 2023 (October 2023 at 55,267 million and July 2023 at 55,016 million). Following this peak, total quick assets show a declining trend through the first half of 2024 and into 2025, reaching approximately 25,327 million by June 2025. This pattern indicates a strong growth phase mid-period followed by a consistent reduction towards the end of the series.

Current Liabilities

Current liabilities generally follow a rising trend with some fluctuations. Beginning at 33,890 million in March 2020, liabilities peaked near 47,794 million in December 2023, which is the highest point in the dataset. Subsequently, there is a downward movement, with liabilities reducing to about 37,726 million by June 2025. The overall trajectory suggests increased short-term obligations during the middle quarters, followed by a partial moderation.

Quick Ratio

The quick ratio presents significant volatility, ranging from a low of 0.42 in September 2024 to a high of 1.78 in October 2023. Initially, the ratio was relatively low at 0.6 in March 2020, then improved to near or above 1.0 through much of 2021 and early 2022, indicating improved liquidity during that phase. A sharp increase occurs in the second half of 2023, corresponding with the peak in quick assets and current liabilities, suggesting a period of enhanced immediate liquidity. However, from the end of 2023 onward, the quick ratio declines substantially below 1.0, falling as low as 0.42 by September 2024, potentially signaling tighter liquidity conditions or increasing short-term liabilities relative to quick assets.

In summary, the data illustrates a period of growth in liquid assets and liabilities culminating in late 2023, accompanied by heightened liquidity as reflected in the quick ratio. Following this, the company experiences a contraction in quick assets and improvement in current liabilities, but liquidity ratios fall below ideal levels, indicating potential short-term financial strain or a shift in asset-liability composition during 2024 and the first half of 2025.

The analysis of the financial trends over the observed quarters reveals several key points regarding liquidity and working capital management.

Total Cash Assets

Total cash assets exhibited noticeable fluctuations throughout the periods. Initially, there was a significant increase from approximately 10.35 billion US dollars in March 2020 to nearly 31.07 billion US dollars by December 2021, indicating strong cash accumulation. However, in 2022 and early 2023, the cash assets declined sharply from a peak of 36.12 billion US dollars in October 2022 to about 19.97 billion US dollars by April 2023. Subsequently, the cash reserve surged to a notable high of 44.79 billion US dollars by July 2023 but dropped again thereafter, reaching around 13.25 billion US dollars by June 2025. This pattern suggests periods of cash build-up possibly for investments or settlements followed by substantial outflows.

Current Liabilities

Current liabilities remained relatively high and volatile during the analyzed timeframe. Starting at approximately 33.89 billion US dollars in March 2020, it saw a dip to about 25.92 billion US dollars by December 2020, suggesting some reduction in short-term obligations. Subsequently, liabilities escalated gradually to peak around 47.79 billion US dollars in March 2024, before declining moderately towards mid-2025, ending near 37.73 billion US dollars. Overall, current liabilities were consistently substantial, reflecting ongoing obligations possibly tied to operations or financing activities.

Cash Ratio

The cash ratio, a stringent liquidity measure, was subject to considerable variation. Initially relatively low at 0.31 in March 2020, it improved steadily, exceeding 0.7 during parts of 2021 and 2022. Notably, during mid-2023, it peaked at values exceeding 1.2, indicating cash assets were sufficient to cover current liabilities fully at those points. However, following this high, the cash ratio declined sharply, falling to as low as 0.16 by September 2024, suggesting a reduced cushion of cash relative to short-term liabilities. Later projections show a slight recovery but remain below initial peak levels. This oscillation points to shifts in liquidity strategy or working capital requirements.

In summary, the financial data reveals periods of aggressive cash accumulation followed by significant drawdowns, while current liabilities have generally trended upward with some fluctuations. The cash ratio corroborates these dynamics, highlighting shifts between strong and more constrained liquidity positions across quarters. These patterns may indicate active management of cash reserves in response to operational needs, investment opportunities, or market conditions over time.