Pfizer Inc. (NYSE:PFE)

Inventory Turnover

The inventory turnover ratio increased steadily from 1.28 in April 2021 to a peak of 3.82 by the end of 2022, indicating improved efficiency in managing inventory. However, from early 2023 onwards, the ratio gradually declined, reaching 1.46 by the third quarter of 2025, which suggests a slowdown in inventory movement or potential overstocking.

Receivables Turnover

The receivables turnover ratio showed fluctuations but generally trended downward after peaking at 9.16 in December 2021. It declined to 4.4 by September 2025, implying a lengthening in the company's collection period and potential challenges in collecting receivables.

Payables Turnover

Payables turnover climbed from 2.68 in April 2021 to a high of 6.66 in April 2022, reflecting faster payments to suppliers during that period. Afterward, the ratio trended downward, stabilizing around 3.3 by the third quarter of 2025, indicating a slower rate of paying suppliers compared to earlier periods.

Working Capital Turnover

The working capital turnover ratio saw significant volatility with values ranging from 1.62 in October 2023 to an extraordinary peak at 5036 in June 2024, which likely represents an anomaly or one-time event. Excluding this spike, the ratio fluctuated with a general trend toward moderate turnover, suggesting periodic shifts in efficiency managing working capital.

Average Inventory Processing Period

The average number of days inventory was held decreased from 284 days in early 2021 to a low of 95 days by the end of 2022, demonstrating enhanced inventory management. Subsequently, this period increased steadily, reaching 251 days by the third quarter of 2025, indicating slower inventory turnover and possible build-up in stock levels.

Average Receivable Collection Period

The collection period shortened from 78 days in April 2021 to 40 days at the end of 2022, showing improved efficiency in receivables collection. From 2023 onward, there was a reversal with the period increasing again to 83 days by September 2025, signifying longer time taken to collect payments from customers.

Operating Cycle

The operating cycle duration reduced notably from 362 days in April 2021 to a minimum of 135 days at the end of 2022, indicating gains in the overall operational efficiency. However, it extended again in subsequent periods, reaching 334 days by September 2025, which points to a slowdown in asset conversion to cash.

Average Payables Payment Period

The payment period to suppliers decreased from 136 days in early 2021 to 55 days in April 2022, reflecting faster payments. Afterward, it generally increased, averaging over 100 days in 2024 and 2025, implying the company took longer to settle payables, which could improve cash flow but might affect supplier relationships.

Cash Conversion Cycle

The cash conversion cycle shortened significantly from 226 days in April 2021 to a low of 63 days by the end of 2022, highlighting an improvement in cash management. From 2023 through 2025, this metric increased steadily to 224 days, indicating a gradual deterioration in the efficiency of converting investments in inventory and receivables back to cash.

Cost of Sales

The cost of sales exhibited significant fluctuations across the observed periods. Initially, it rose sharply from 4,157 million USD to a peak of 9,932 million USD by the fourth quarter of 2021. Following this, the cost showed a general decline with some volatility, decreasing to 3,237 million USD by the third quarter of 2023. However, subsequent quarters saw an increase again, reaching 7,562 million USD by the end of 2023. In 2024, the cost of sales held relatively stable figures around the 3,300 to 5,909 million USD range before dipping to lower levels below 4,200 million USD in later quarters of 2025. Overall, the pattern suggests periods of rising production or sales activity followed by retrenchment or inventory adjustments.

Inventories

Inventory levels showed a consistent upward trend over the entire period analyzed. Beginning at 8,493 million USD in early 2021, inventories increased steadily, reaching a high of approximately 11,721 million USD by the third quarter of 2024. Slight fluctuations occurred, but the general trajectory was an accumulation of stock, indicating either strategic stockpiling or slower sales leading to higher inventory holding.

Inventory Turnover

Inventory turnover ratios depicted an overall declining trend, suggesting a decrease in the efficiency with which inventories were converted into sales. Starting from a low turnover of 1.28 in early 2021, the ratio improved significantly in 2021, peaking at 3.82 by the end of 2021. Thereafter, turnover ratios trended downward steadily to around 1.46 by the third quarter of 2025. This decline aligns with increased inventory levels and fluctuating cost of sales, implying that stock is being held longer or sold at a slower rate over time.

Summary

The data indicates an environment of volatility in cost of sales with spikes potentially related to operational scaling or market conditions, followed by declines possibly due to cost control or reduced demand. Inventories progressively increased, which combined with decreasing inventory turnover ratios, may point towards growing stock levels relative to sales activity. Collectively, these patterns suggest a strategic or market-driven scenario where inventory accumulation outpaces sales, impacting turnover efficiency and potentially increasing holding costs in the medium term.

The financial data reveals notable fluctuations in revenue, trade accounts receivable, and receivables turnover over the examined periods. The overall patterns suggest variations in sales performance, credit management, and collection efficiency.

Revenues

Revenues demonstrated a significant increase from early 2021 through mid-2022, peaking in the third quarter of 2022. Afterward, a sharp decline occurred in the subsequent quarters of 2022 and into 2023, reaching a low point by mid-2023. Following this trough, revenues began to recover steadily towards the end of 2023 and continued improving into 2024 and 2025, although they did not surpass the mid-2022 peak within the observed timeframe.

Trade Accounts Receivable, Net

The trade accounts receivable showed a general upward trend from early 2021 through late 2022, reaching a high point before dropping significantly in the final quarter of 2022. Volatility is observed thereafter, with fluctuating levels in 2023 and 2024. The volumes increased substantially again entering 2025, suggesting shifts in credit grant practices or timing of collections.

Receivables Turnover Ratio

The receivables turnover ratio, indicating the efficiency of collections, rose steadily up to the end of 2021, reflecting improved cash collection relative to outstanding receivables. The ratio peaked sharply in the last quarter of 2022, corresponding with the steep decline in trade receivables, implying heightened collection efforts or reduced credit sales. Following this spike, the turnover ratio generally declined throughout 2023 and into 2024, dipping close to earlier levels by late 2024. A moderate recovery in turnover is visible in early 2025 but remains below peak values.

Insights

The initial growth in revenues aligns with a rising trend in receivables balances, while the increase in turnover ratios suggests effective collection during this period. Subsequently, the sharp decreases in both revenues and receivables at the end of 2022, followed by turnover ratio volatility, may indicate changes in sales volume, credit policy adaptations, or adjustments in collection practices. The partial recovery in revenues and moderately improving turnover in 2024 and 2025 suggest stabilization but not a return to peak collection efficiency observed in late 2022. This pattern highlights the importance of continued monitoring of credit and receivables management to support sustained revenue growth.

The analysis of the quarterly financial data reveals several significant trends regarding cost of sales, trade accounts payable, and payables turnover ratios over the observed periods.

Cost of Sales

The cost of sales exhibits considerable volatility across quarters, with values ranging from a low of approximately $2,845 million to a high near $9,932 million. There are sharp declines following peak quarters, indicating possible fluctuations in production volume, changes in product mix, or adjustments in input costs. For instance, after peaking in the fourth quarter of 2021, cost of sales dropped notably in the subsequent quarters before experiencing intermittent spikes again in late 2023 and 2024. Overall, the pattern suggests cyclical characteristics or response to external market factors or internal operational changes.

Trade Accounts Payable

Trade accounts payable steadily increase from early 2021 through to the fourth quarter of 2022, moving from about $4,064 million to almost $6,809 million, indicating potentially increasing credit terms with suppliers or higher procurement volume. Following this peak, payable balances experience moderate fluctuations but generally maintain a level above $5,000 million, underscoring sustained supplier obligations. The stability at relatively high payable levels may point to sustained supplier leverage or optimized working capital management practices.

Payables Turnover Ratio

The payables turnover ratio shows a broadly declining trend from a peak of 6.66 in the second quarter of 2022 down to values around 3.3 by mid to late 2025. This decline suggests that the company is taking longer to pay its suppliers over time, possibly reflecting extended payment terms or a strategic liquidity management approach. Noticeable decreases in turnover correspond to the periods where accounts payable remain elevated or when cost of sales decreases. Such a trend may improve cash flow in the short term but could impact supplier relationships if prolonged.

In summary, the data reveals fluctuating costs of sales with marked peaks and troughs, steadily elevated trade payables with clear upward movement until late 2022 followed by stabilization, and a gradual reduction in the payables turnover ratio over time, implying lengthening payment periods. These patterns could signify operational and financial strategies related to cost management, supplier negotiations, and liquidity optimization.

The working capital exhibits notable volatility over the observed periods. Initially, working capital increased moderately from approximately $12.9 billion to $17 billion between the first and fourth quarters of 2021. A subsequent rise is seen in mid-2022, peaking at around $26.1 billion in the third quarter, followed by a sharp decline to $9.1 billion by year-end 2022. During 2023, working capital fluctuates significantly, with a remarkable spike to roughly $42.9 billion in the third quarter, then a steep drop to negative $4.5 billion in the fourth quarter. The first half of 2024 continues this volatility, including negative and near-zero values, but then shows a general upward trend through to mid-2025, ending near $10.3 billion.

Revenues demonstrate a cyclical pattern with considerable fluctuations. They began at approximately $14.5 billion in early 2021, climbed to peak above $27.7 billion in mid-2022, then declined to mid-teens billion dollars by late 2023. Thereafter, revenues reflect a moderate recovery trend, ascending to around $16.7 billion by the third quarter of 2025. The revenue trajectory overall reveals a series of peaks around mid-year 2022, followed by decreases, and a partial rebound toward the latter periods.

Working capital turnover ratios display high variability and some irregularities. Early 2021 shows ratios around 3.6 to 4.8, escalating sharply to over 6 in early 2022, then decreasing through late 2022. A pronounced spike is observed at the end of 2022, reaching 11, followed by a dramatic fall to approximately 1.6 in late 2023. Certain data points are missing or appear anomalous, with extreme ratio values such as 29.17 and 5036 recorded sporadically, suggesting potential data inconsistencies or extraordinary short-term operational conditions. Toward mid-2025, the turnover ratio stabilizes somewhat, fluctuating between 6 and 10.

Overall, the patterns indicate a business experiencing substantial short-term fluctuations in liquidity and operational efficiency, as reflected by working capital and its turnover. The revenue figures, while volatile, show underlying cyclical recovery tendencies. The irregular working capital turnover ratios warrant cautious interpretation due to potential data anomalies but generally underline the variability in capital utilization across periods.

Working Capital

Significant fluctuations with sharp increases and decreases, including periods of negative working capital.

Revenues

Cyclical pattern with peaks around mid-2022, followed by declines and moderate recovery by 2025.

Working Capital Turnover

Highly variable ratios with some extreme values, indicating variability in how efficiently working capital supports sales.

Inventory Turnover

The inventory turnover ratio shows a notable upward trend from April 2021 through the end of 2022, increasing from 1.28 to 3.82. This indicates a progressively faster rate of inventory sales or usage during this period. Following this peak, the ratio declines steadily throughout 2023 and into 2025, falling to 1.46 by the third quarter of 2025. The decrease suggests a slowing in inventory movement or higher inventory levels relative to sales in the later periods.

Average Inventory Processing Period

The average inventory processing period, expressed in days, inversely mirrors the inventory turnover pattern. It decreases significantly from 284 days in April 2021 to a low of 95 days at the end of 2022, reflecting faster inventory processing and turnover. Subsequently, the processing period lengthens progressively, reaching 251 days by the third quarter of 2025. This increase indicates inventory remains on hand longer, consistent with the declining turnover ratio.

Summary of Trends and Insights

The data reveals a phase of improving operational efficiency in inventory management during 2021 and 2022, as evidenced by rising inventory turnover and shortening processing periods. This suggests enhanced inventory control and possibly stronger sales or optimized supply chain activities. However, from 2023 onward, the reversal of these trends implies a slowing in inventory velocity, potentially due to demand shifts, supply chain disruptions, or strategic changes in inventory policy. The lengthening processing period may also signal overstocking or reduced sales effectiveness in the latter periods. Continuous monitoring of these metrics is advisable to identify underlying causes and guide inventory management strategies.

Receivables Turnover Ratio

The receivables turnover ratio exhibits notable fluctuations across the observed periods. Initially, there is an improving trend from 4.7 to a peak of 7.08, indicating faster collection of receivables. This is followed by a slight decline and variability, with values oscillating between approximately 5 and 9.16, the highest observed value occurring in the December 2022 quarter.

Post this peak, the ratio demonstrates a general downward trend, declining to levels below 5 by the end of the timeline. This suggests a gradual decrease in the efficiency of collecting receivables over time, especially notable from early 2023 onward.

Average Receivable Collection Period

The average collection period, measured in days, shows an inverse relationship to the receivables turnover ratio, as expected. The data reveal a reduction from 78 days initially to a low of 40 days by December 2022, coinciding with the peak in turnover ratio. This reflects accelerated collection processes during that period.

Subsequently, the average collection period increases steadily, reaching up to 87 days by September 2024, before experiencing some fluctuations. The prolonged collection period in later quarters implies a slowdown in the speed of receivables being converted into cash.

Overall Trend and Insights

The early period is characterized by improving collection efficiency, highlighted by increasing turnover ratio and decreasing days sales outstanding. This may indicate operational improvements or policy changes that enhanced receivables management.

However, from late 2022 forward, the trend reverses. The increasing average collection period coupled with a declining turnover ratio signals potential challenges in receivables management, possibly due to market conditions, customer payment behaviors, or internal process changes.

These shifts necessitate further analysis to understand underlying causes and to implement measures aimed at restoring collection efficiency, thereby improving cash flow consistency.

The analysis of the quarterly financial data reveals notable trends in the inventory processing period, receivable collection period, and operating cycle over the successive periods.

Average Inventory Processing Period

The number of days for inventory processing initially decreased substantially from 284 days to a low of 95 days between early 2021 and the end of 2022, suggesting improved inventory turnover efficiency during this period. However, starting in April 2023, the inventory processing period began to rise again, reaching 251 days by the third quarter of 2025. This upward trend indicates a gradual slowdown in inventory turnover in the most recent periods.

Average Receivable Collection Period

The receivable collection period shows a general decline from 78 days in April 2021 to 40 days by the end of 2022, reflecting enhanced effectiveness in collecting receivables. From early 2023 onward, this period exhibits more variability, increasing to peaks such as 87 days in September 2024, before fluctuating around the high 60s to low 80s days by late 2025. This suggests some recent challenges or delays in receivable collections.

Operating Cycle

The operating cycle, which combines inventory and receivable periods, mirrors the patterns observed individually. It decreased significantly from 362 days in early 2021 to 135 days at the end of 2022, indicating a more efficient overall operation. Yet, from 2023 forward, the operating cycle expands once more, reaching 334 days by the third quarter of 2025. This resurgence points to a prolonged cash conversion cycle compared to the previous trough.

In summary, the data suggest an initial phase of improving operational efficiency in inventory management and receivable collection through late 2022, which then reverses into a trend of increasing days measurable in both metrics. Such shifts impact the operating cycle directly, with the overall cash-to-cash cycle lengthening in the more recent periods. These patterns indicate evolving conditions in working capital management that could benefit from focused attention to sustain past operational gains.

The analysis of the payables turnover ratio and average payables payment period over the given quarterly intervals reveals several noteworthy patterns and shifts.

Payables Turnover Ratio

The payables turnover ratio demonstrates an overall declining trend following an initial period of growth. Starting from a low point of 2.68 in early April 2021, the ratio rose sharply to a peak of 6.66 by April 2022. After this peak, the ratio steadily decreased with some fluctuations, reaching values near 3.3 by the latter part of 2025. This indicates a gradual reduction in the frequency at which the company pays off its suppliers over these periods.

Average Payables Payment Period

This metric shows an inverse relationship to the payables turnover ratio, as expected. The average days taken to pay suppliers decreased from 136 days in April 2021 to a low of 55 days in the second quarter of 2022, corresponding with the peak payables turnover ratio. Subsequently, the payment period increased steadily, reflecting slower payments to suppliers. By mid-2025, the average payment period had risen back to around 110 days, indicating a lengthening of the payment cycle.

Summary of Trends and Interpretations

Initially, the company improved its liquidity in terms of payables by reducing the payment period, thus increasing the payables turnover ratio substantially within one year. This suggests more efficient management of accounts payable during this timeframe. However, starting from mid-2022, a reversal in this pattern is observed, with the company taking longer to settle its payables and the turnover ratio declining. The extended payment periods in recent quarters might reflect strategic working capital management actions, such as preserving cash or responding to external financial pressures.

Overall, the shift from faster to slower payment cycles in the latter periods suggests a change in financial policy or operational conditions affecting supplier payments. Monitoring this trend is essential, as prolonged payment periods can affect supplier relationships or indicate liquidity constraints.

The financial analysis over the examined periods reveals several notable trends in the company's operational efficiency and working capital management, as evidenced by the changes in inventory processing, receivable collection, payables payment, and the cash conversion cycle.

Average Inventory Processing Period

This metric shows a general downward trend from 284 days in early 2021 to a low of 95 days at the end of 2022, indicating an improvement in inventory management and faster turnover in this period. However, from 2023 onward, the average inventory processing days markedly increase, reaching 251 days by the third quarter of 2025. This reversal suggests potential challenges in inventory management, possibly due to supply chain disruptions or decreased sales velocity.

Average Receivable Collection Period

The receivable collection period decreased from 78 days in early 2021 to 40 days by the end of 2022, illustrating enhanced efficiency in collecting receivables. Despite this improvement, the period begins to lengthen from 2023 forward, rising to 83 days by the third quarter of 2025, which may imply increasing difficulties in timely collections or changes in credit terms extended to customers.

Average Payables Payment Period

The payables payment period generally declined from 136 days in early 2021 to 55 days by mid-2022, suggesting a strategy of paying suppliers more promptly. Subsequently, the period fluctuates and trends upward to 110 days by late 2025, indicating a shift toward longer payment terms or delayed payments to suppliers, which could be a tactical move to preserve cash.

Cash Conversion Cycle

The cash conversion cycle (CCC) decreased substantially from 226 days in early 2021 to a low of 63 days at the end of 2022, reflecting enhanced overall working capital efficiency due to faster inventory turnover and receivable collections combined with efficient payables management. However, starting in 2023, the CCC lengthens progressively to 224 days by the third quarter of 2025, suggesting a deterioration in the efficiency of converting resources into cash. This lengthening CCC is consistent with the observed increases in inventory days and receivables collection period, signaling potential liquidity pressures or operational inefficiencies.

In summary, the company demonstrated significant improvements in working capital efficiency through 2022, reducing the time tied up in inventory and receivables while accelerating payments. Nevertheless, the positive trend reversed post-2022, with rising inventory and receivables days and an extended cash conversion cycle, potentially indicating emerging challenges in sales, collections, inventory management, or a strategic shift in supplier payment practices. Close monitoring and management of these components appear necessary to sustain liquidity and operational efficiency going forward.