Pfizer Inc. (NYSE:PFE)

The financial data reveals several important trends in operational efficiency and cash flow management over the analyzed periods.

Inventory Turnover and Average Inventory Processing Period

Inventory turnover showed a general increase from 1.08 in early 2021 to a peak of around 3.82 in early 2023, indicating improved efficiency in managing inventory. This was reflected in a decreasing average inventory processing period from 338 days to about 95 days during the same timeframe. However, following this peak performance, inventory turnover declined steadily to approximately 1.6 by early 2025, with the average inventory processing period increasing correspondingly to 229 days. This suggests a recent slowdown in inventory turnover and a lengthening of inventory holding times.

Receivables Turnover and Average Receivable Collection Period

Receivables turnover initially demonstrated some volatility, with values near 5 in early 2021, rising to 9.16 by early 2023, which implies faster collection of receivables. This is supported by a decline in the average receivable collection period from 69 days to as low as 40 days. Nonetheless, after this improvement, turnover declined to around 5.27 by early 2025, and the collection period extended back up to approximately 69 days. This pattern indicates a recent easing in the efficiency of receivables management.

Payables Turnover and Average Payables Payment Period

Payables turnover experienced an increase from 2.02 to a high of about 6.66 between early 2021 and mid-2022, signaling faster payment to suppliers during that period. Correspondingly, the average payables payment period decreased from 181 days to around 55 days. Subsequently, payables turnover declined to roughly 3.3 by early 2025, with the payment period increasing to about 110 days, indicating slower payments to suppliers more recently.

Working Capital Turnover

Working capital turnover showed notable fluctuations, increasing from approximately 3.6 to a peak of 11 in early 2023, then dramatically decreasing thereafter with some irregular spikes in later periods, reaching extremely high values such as 5036 in mid-2024 (likely an anomalous data point). Despite these irregularities, the overall trend suggests periods of both improved and diminished efficiency in utilizing working capital to generate sales.

Operating Cycle and Cash Conversion Cycle

The operating cycle shortened significantly from 407 days to 135 days between early 2021 and early 2023, indicative of better coordination between inventory turnover and receivables collection. It then extended again to nearly 300 days by early 2025, showing a reversal in operational efficiency. The cash conversion cycle followed a similar trajectory, dropping from 226 days to around 63 days at its best point before lengthening back to approximately 188 days, reflecting challenges in efficiently converting resource investment back into cash in the later periods.

In summary, the data illustrates a period of marked improvement in the management of inventory, receivables, and payables up until early 2023, with associated enhancements in working capital utilization and cash flow cycles. This was followed by a gradual deterioration in these efficiencies through to early 2025, suggesting emerging operational challenges or shifts in business conditions that have impacted the overall financial performance metrics.

The cost of sales exhibits significant fluctuations over the observed periods. Initially, the cost of sales rises sharply from 1,940 million USD to a peak of 9,932 million USD in October 2021, followed by a moderate decline and subsequent variability. Notably, after the peak, the cost decreases in several quarters, reaching a low point of 2,845 million USD in March 2025. The overall pattern suggests periods of increased production or sales activity followed by downturns or adjustments.

Inventories show a generally increasing trend throughout the timeline. Starting at 8,423 million USD, inventories gradually increase with some fluctuations, peaking near 11,721 million USD in September 2024 before slight decreases in the final quarters. This upward trend in inventories indicates a buildup of stock over time, which may reflect strategic inventory management or changes in demand expectations.

The inventory turnover ratio, available from late 2020 onwards, reveals a rising trend initially, starting near 1.08 and climbing steadily to a peak of 3.82, which occurs around early 2022. Following this peak, the turnover ratio declines gradually, dropping to approximately 1.6 by March 2025. This pattern indicates an initial improvement in how efficiently inventories are converted into sales, eventually followed by a slowdown in turnover efficiency. The decreasing turnover ratio in later periods might suggest challenges in inventory management or slowing sales relative to stock levels.

Cost of Sales

Significant increase between early 2020 to late 2021, followed by fluctuations and an overall decline towards early 2025.

Inventories

Gradual increase over the entire period, peaking in late 2024, indicating stock accumulation.

Inventory Turnover

Initially improving up to early 2022, followed by a steady decline until early 2025, suggesting diminishing efficiency in inventory utilization.

The quarterly financial data reveals several notable trends over the analyzed periods. Revenues demonstrate a fluctuating pattern with significant variability across quarters. Initially, revenues ranged around $10 billion, rising sharply to a peak near $24 billion in late 2021. Subsequently, a decline occurred with values diminishing to approximately $13 billion by mid-2023, followed by a partial recovery to near $18 billion in late 2024 before decreasing again in early 2025.

Trade accounts receivable, net of allowance for doubtful accounts, generally follow an upward trajectory from about $7.9 billion early in the dataset to a peak above $16 billion around late 2022. Subsequently, there is a downturn in receivables values, fluctuating between roughly $10 billion to $14 billion from 2023 onward, indicating some volatility in accounts receivable management or collection efficiency during the latter periods.

The receivables turnover ratio presents a varied trend, starting at 5.28 and rising to a high of 9.16 in the first quarter of 2023, indicating improved efficiency in collecting receivables during that period. However, after this peak, the ratio declines steadily to values near 4.18 by late 2024 before slightly recovering towards 5.55 and 5.27 in the final quarters. This decreasing trend suggests a slowdown in the pace of collecting receivables or possible extension of credit terms in recent periods.

Revenues

Show a pronounced peak in late 2021 followed by a decline and partial recovery, indicating variability in sales or external market conditions affecting revenue generation.

Trade Accounts Receivable

Increase steadily through 2022, then fluctuate with a declining trend in recent quarters, possibly reflecting changes in credit management or customer payment behavior.

Receivables Turnover Ratio

Improved collection efficiency is evident up to early 2023, followed by a decline, suggesting slower collection processes or altered receivables management strategies thereafter.

Cost of Sales

The cost of sales exhibits significant fluctuations over the reported periods. Starting at 1,940 million US dollars in March 2020, it initially shows a moderate increase, reaching a peak of 9,932 million in October 2021. After this peak, the cost experiences volatility, with notable declines and rises, including a drop to 2,845 million by March 2025. This variability suggests periods of increased production or procurement costs followed by phases of reduced expense or potential cost control measures.

Trade Accounts Payable

Trade accounts payable demonstrate a generally increasing trend until December 2022, rising from 3,972 million US dollars in March 2020 to 6,809 million. Post this peak, values fluctuate within a range but show a slight downward tendency toward the end of the dataset, ending at 5,240 million by March 2025. This pattern reflects changes in credit terms or supplier payment practices, indicative of shifts in working capital management.

Payables Turnover Ratio

The payables turnover ratio improves markedly from 2.02 in December 2020, reaching a maximum of 6.66 in April 2022, indicating a faster payment cycle to suppliers during this period. Following this peak, the ratio declines steadily, stabilizing around the 3.2 to 4.6 range toward the end of the periods reported. This decline suggests a lengthening of payment terms or slower payables settlement, which could be associated with cash flow management strategies or negotiating supplier terms.

Summary Insights

Overall, the trends in cost of sales and trade accounts payable show variability that may reflect operational scaling, supply chain factors, or strategic procurement decisions. The payables turnover ratio's initial increase followed by a decline implies a shift from accelerated payments to a more extended payment cycle, which could affect liquidity and supplier relations. The interplay between these metrics highlights active management of cost structures and working capital across the periods analyzed.

The financial data reveals considerable fluctuations in working capital, revenues, and working capital turnover across the observed quarters. A detailed analysis of each item follows to discern patterns and notable changes over the period.

Working Capital

The company’s working capital exhibits significant volatility throughout the reviewed quarters. Initially, it begins at a modest value of 848 million US$ in March 2020, sharply rising to a peak of 38,700 million US$ by July 2023. This upward trajectory suggests an accumulation of current assets relative to current liabilities during this timeframe.

However, several quarters show negative values, notably -4,461 million US$ in December 2023 and -5,994 million US$ in September 2024, indicating periods where current liabilities exceeded current assets. This suggests intervals of tighter liquidity or increased short-term obligations.

Overall, the working capital does not maintain a consistent trend but fluctuates, with some quarters evidencing notably high positive values and others displaying deficits. This irregularity may point to episodic changes in operational activities, cash management, or short-term financing strategies.

Revenues

Revenues display a general upward trend from March 2020 at 10,083 million US$ to a high point of 27,742 million US$ in July 2022. This strong growth over two years indicates expanding sales or successful product penetration.

Following this peak, revenues decline steadily over subsequent quarters, dropping to approximately 13,715 million US$ by March 2025. This downward trend after mid-2022 might reflect market saturation, increased competition, supply challenges, or changes in product demand.

The variability in revenues alongside the fluctuating working capital points toward a dynamic operational environment, where sales growth phases are interspersed with slower revenue periods.

Working Capital Turnover

The working capital turnover ratio, a measure of efficiency in using working capital to generate sales, shows wide variations, reflecting the fluctuations in both working capital and revenues.

For example, the ratio ranges from 1.62 in December 2023 to a notably high figure of 29.17 at an unspecified quarter, and spikes dramatically to 5,036 and 8.64 in later quarters. The exceptionally high numbers may suggest either near-zero or negative working capital values, causing the ratio to inflate or become less meaningful.

Periods with higher turnover ratios indicate more efficient use of working capital to drive revenues, whereas lower ratios could denote inefficient capital utilization or temporary operational constraints.

Given the erratic nature of this ratio and the presence of missing values, caution should be used when interpreting these figures, as extreme values may reflect accounting or operational anomalies rather than sustainable performance.

In summary, the data indicates that the company experienced significant revenue growth through mid-2022, accompanied by strong but volatile working capital positions. Subsequent quarters illustrate a contraction in revenues and erratic liquidity, as reflected in the working capital and turnover ratios. The trends emphasize fluctuating operational conditions and potential challenges in working capital management during the most recent periods.

Inventory Turnover Ratio

The inventory turnover ratio demonstrates a notable upward trend from April 2021 to April 2023, increasing from 1.08 to a peak of 3.82. This indicates an improvement in the efficiency of inventory management during this period. Following this peak, a decline is observed from April 2023 through March 2025, dropping from 3.07 to 1.60. The decrease suggests a reduction in the rate at which inventory is sold or used, implying a slowing turnover pace in the later periods.

Average Inventory Processing Period

The average inventory processing period, measured in days, exhibits an inverse pattern relative to the inventory turnover ratio. Initially, from April 2021 to April 2023, the processing period decreases significantly from 338 days to 95 days, reflecting more rapid inventory turnover and enhanced operational efficiency. However, from April 2023 onward, there is a gradual increase in the number of days, rising to 229 days by March 2025. This increase corresponds to the decline in inventory turnover ratio, indicating a lengthening of the inventory holding period and potentially slower movement of goods through the inventory system.

Overall Trends and Insights

The data reveals a clear cyclical pattern in inventory management performance over the examined time frame. The initial improvement phase suggests successful strategies in inventory utilization and sales acceleration, resulting in faster turnover and reduced inventory days. In contrast, the subsequent decline phase points to potential challenges in maintaining these efficiencies, possibly due to changes in market demand, supply chain disruptions, or alterations in product mix. Maintaining a balance between inventory turnover and processing periods will be crucial to optimize working capital and operational performance in future periods.

The receivables turnover ratio demonstrates notable fluctuations over the observed periods, indicating variations in the efficiency with which the company collects its accounts receivable. Starting from a ratio of 5.28, the turnover increased steadily to reach a peak of 9.16, reflecting improved collection efficiency. However, subsequent periods show a decline, with the ratio dropping back to levels around 4.18 before a modest recovery to 5.27 toward the latest period.

Correspondingly, the average receivable collection period, expressed in days, exhibits an inverse pattern relative to the turnover ratio. Initially, the collection period decreased from 69 days to a low of 40 days, demonstrating accelerated collections. In later periods, the number of days increased again, reaching as high as 87 days before improving slightly to 69 days in the final period.

Overall, these trends suggest the company experienced periods of increased efficiency in receivables management, particularly notable around the peak turnover and low collection period intervals. Nonetheless, the more recent data points indicate a deterioration in collection efficiency, as evidenced by longer collection times and lower turnover ratios. This pattern may warrant further investigation to identify underlying causes and assess any impact on liquidity and working capital management.

Average Inventory Processing Period

The average inventory processing period demonstrates a general decreasing trend starting from 338 days at the beginning of the available data. It declines steadily to around 95 days by April 2, 2023, indicating improved efficiency in inventory turnover. However, following this point, the period fluctuates and shows an upward trend, increasing to 229 days by March 30, 2025. This suggests a slowdown in inventory processing efficiency in the most recent periods.

Average Receivable Collection Period

The receivable collection period initially increases from 69 days to a peak of 78 days and then decreases to 40 days by April 2022, signaling improved collection efficiency. Following this low point, the collection period gradually rises, reaching 87 days by December 31, 2024, before slightly declining to 66-69 days in the final observed periods. This pattern indicates variability in accounts receivable management, with some recent inefficiencies in collections.

Operating Cycle

The operating cycle follows a downward trend from 407 days initially down to 135 days in April 2022, reflecting enhanced overall operational efficiency by reducing the combined duration of inventory processing and receivables collection. After this minimum point, the cycle lengthens progressively, peaking at 306 days by March 2025. This reversal suggests that operational efficiency declined in the later periods, potentially driven by increases in both inventory processing and receivable collection times.

The analysis of the payables turnover ratio over the observed periods reveals a significant fluctuation with an overall trend of initial increase followed by notable declines. The ratio was unreported before December 31, 2020, when it registered at 2.02, subsequently rising to a peak of 6.66 by July 3, 2022. After this peak, the ratio begins a downward trajectory with some variability, decreasing to 3.17 by March 30, 2025.

Correspondingly, the average payables payment period, measured in days, exhibits an inverse relationship with the payables turnover ratio. Starting at 181 days on December 31, 2020, it declines to 55 days by July 3, 2022, coinciding with the peak payables turnover ratio. Following that, the payment period extends again, reaching 110 days by March 30, 2025.

Payables Turnover Ratio

Initial reporting shows a gradual increase from 2.02 to a high of 6.66, indicating improved efficiency in paying suppliers during this phase.

Post-peak, the ratio declines to around 3.17 towards the end of the timeline, suggesting a reduced pace in settling payables.

Average Payables Payment Period

The payment period decreases sharply from 181 days to 55 days, reflecting quicker payments corresponding to the increased turnover ratio.

Subsequently, it lengthens back to 110 days, indicating slower payment practices aligning with the falling turnover ratio.

This analysis points toward a phase of strengthening liquidity management and creditor payment efficiency up to mid-2022, followed by a period of less aggressive payment terms or possibly increasing payables balances. The inverse correlation between the two metrics is consistent with typical financial behavior, where a higher turnover rate corresponds to a shorter payment period. The later trend may warrant further examination to understand underlying causes, such as changes in credit policy, supplier negotiations, or cash flow considerations.

Average Inventory Processing Period

The average inventory processing period shows a decreasing trend from April 2021 through April 2022, declining from 338 days to 95 days, indicating improved efficiency in inventory turnover. However, beginning from April 2022, the period starts to gradually increase again, reaching a peak of 229 days by March 2025. This reversal suggests a possible slowdown in inventory movement or increased inventory holding times in later periods.

Average Receivable Collection Period

The receivable collection period initially fluctuates between 69 and 40 days from April 2021 to April 2023, reaching its lowest point at 40 days. Afterward, there is a general upward trend in collection time, increasing to 87 days by December 2024 before slightly retracting to 66-69 days by March 2025. This variability indicates some challenges in receivables management with a tendency toward longer collection times in recent periods.

Average Payables Payment Period

The payables payment period experiences a notable decline from 181 days in April 2021 to a low of 55 days by July 2021, reflecting quicker payments to suppliers. Following this, the period gradually increases again, with some fluctuations, ultimately reaching 115 days by March 2025. This suggests a strategic extension of payment terms or delayed payments to suppliers in the most recent quarters.

Cash Conversion Cycle

The cash conversion cycle mirrors the trends seen in inventory and receivables. It decreases from 226 days in April 2021 to a low of 63 days by April 2023, signifying improved cash flow efficiency. This improvement is followed by an upward revision, peaking at 207 days in September 2024 before slightly decreasing to 173-188 days toward early 2025. The increase denotes a lengthening of the time taken to convert resources into cash, which could impact working capital management negatively.

Overall Insights

The financial data indicate an initial period of operational improvement and efficiency gains from early 2021 through mid-2023, characterized by shortened inventory processing, receivables collection, and cash conversion cycles. However, from mid-2023 onwards, there is a consistent reversal in these trends, with increasing durations in all key metrics, pointing toward potential challenges in working capital management, possibly due to changing market conditions or strategic shifts in payment terms and inventory policies.