Pfizer Inc. (NYSE:PFE)

The financial ratios and efficiency metrics over the reported periods reveal distinct trends in inventory management, receivables, payables, and overall working capital effectiveness.

Inventory Turnover and Average Inventory Processing Period

The inventory turnover ratio showed a rising trend from early 2020, peaking around the end of 2021 at approximately 3.82, indicating faster inventory sales. Subsequently, the ratio declined steadily to about 1.52 by mid-2025, suggesting slower turnover. Correspondingly, the average inventory processing period decreased sharply from 338 days in early 2020 to around 95 days by early 2022, reflecting improved inventory management. However, after this improvement, the period began increasing again, reaching 239 days by mid-2025, indicating a slowdown in inventory movement.

Receivables Turnover and Average Receivable Collection Period

Receivables turnover ratio fluctuated with an overall pattern of moderate variability. After an initial rise towards late 2021, peaking around 9.16, the ratio declined to values near 5.3 by mid-2025. The average receivable collection period mirrored this ratio, shortening to about 40 days in early 2022 but extending to roughly 69 days by mid-2025. These movements suggest a temporary improvement in collecting receivables followed by a gradual lengthening of the collection period.

Payables Turnover and Average Payables Payment Period

The payables turnover ratio increased steadily to about 6.66 during 2022, indicating quicker payment of suppliers. This was accompanied by a decrease in the average payables payment period from 181 days in 2020 to 55 days by mid-2021. However, post-2022, turnover declined to approximately 3.44 by mid-2025, and the payment period extended again to over 100 days. This trend suggests a relaxation in payment terms or cash management strategies in recent periods.

Working Capital Turnover

The working capital turnover ratio exhibited substantial fluctuations with some extreme values, such as 29.17 and 5036 in certain periods, likely indicating data irregularities or one-time adjustments. Excluding these anomalies, the ratio showed a general declining pattern from about 6.1 in 2021 to values around 6.64 and 10.68 in later periods, though with significant volatility. This suggests varying efficiency in using working capital to generate sales.

Operating Cycle and Cash Conversion Cycle

The operating cycle contracted significantly from over 400 days in 2020 to around 135 days by early 2022, indicating enhanced overall operational efficiency. However, it then extended again to over 300 days by mid-2025, signaling a reversal in this trend. Similarly, the cash conversion cycle shortened to about 63 days by early 2023 but gradually expanded to over 200 days by mid-2025, implying longer cash tied-up duration in operations and potentially decreased liquidity efficiency in recent years.

In summary, the data portrays initial improvements in inventory turnover, receivables collection, payables management, and overall operational efficiency through early 2022. After this period, the metrics generally indicate a trend toward longer processing and collection times, decreased turnover rates, and a lengthening of the cash conversion cycle. These patterns may reflect changes in business conditions, supply chain dynamics, or management policies affecting working capital efficiency.

Cost of Sales

The cost of sales exhibited significant fluctuation throughout the periods under review. Starting at 1,940 million USD in March 2020, it initially decreased slightly by June 2020 but then experienced a sharp increase peaking at 9,932 million USD in October 2021. Following this peak, the cost showed a considerable decline, reaching levels near 3,237 million USD by July 2023. Subsequently, it surged again in October 2023 to 9,269 million USD, followed by another decrease towards mid-2024 and projected values for 2025 fluctuate between approximately 2,845 million and 5,909 million USD. This variability indicates periods of intensified production or sales activity alternating with phases of reduced cost outlays.

Inventories

Inventory levels presented a generally upward trend with some periods of stability. Starting at 8,423 million USD in March 2020, inventories rose intermittently, crossing notable thresholds such as 10,454 million USD in July 2022 and peaking around 11,721 million USD in September 2024. Although occasional slight decreases occurred, the overall pattern points to an accumulation of inventory over time, indicating either increased production capacity or strategic stockpiling. The inventory levels remained consistently above 8,000 million USD, reflecting substantial asset commitment in stock.

Inventory Turnover

Inventory turnover ratios began to be available from December 2020 onward, showing a pronounced increase from 1.08 to a peak of approximately 3.82 during early 2022. This upward trend suggests enhanced efficiency in converting inventories to sales or utilization, reaching the highest turnover in the sample period. Following this peak, turnover ratios declined gradually to around 1.52 projected for mid-2025, indicating a slowing in turnover efficiency over the latter periods. This decline may reflect increasing inventory levels relative to sales or a strategic adjustment in inventory management practices.

Summary of Observations

The financial items examined indicate a dynamic operational environment characterized by cyclical variations in costs and inventory management. The cost of sales shows volatility, with alternating periods of rising and falling expenses, possibly linked to product demand cycles or supply chain factors. Inventory levels have trended upward, suggesting accumulation or expansion strategies, while inventory turnover peaked mid-period before receding. The interplay of these trends points toward fluctuating operational efficiency and inventory utilization over the timeframe analyzed.

The financial data reveals several trends and fluctuations in key metrics over the analyzed periods.

Revenues

Revenues showed significant variability throughout the timeline. Initially, from March 2020 to December 2020, there was a moderate upward trajectory, increasing from 10,083 million US dollars to 11,684 million. The first quarter of 2021 marked a substantial surge, with revenues reaching 14,516 million and continuing to peak at 24,035 million by October 2021. Following this peak, there was a noticeable decline towards the end of 2021 and into 2022, followed by further fluctuations. Notably, during the first half of 2023, revenues decreased sharply, hitting a low around 13,007 million in July 2023, before recovering gradually towards the end of 2023 and stabilizing with some volatility through mid-2025. The revenue pattern suggests periods of strong growth interspersed with phases of contraction, indicating possible operational or market-related influences affecting performance.

Trade Accounts Receivable, Net of Allowance for Doubtful Accounts

This metric displayed substantial variability. Starting at 9,881 million in March 2020, the amount generally increased through to October 2022, with intermittent fluctuations, reaching a peak of 16,076 million before declining sharply to 10,952 million in December 2022. The values thereafter oscillated between approximately 10,000 million and 14,000 million, ending near 12,078 million by mid-2025. The high points in trade receivables, particularly around late 2021 to 2022, indicate periods of increased credit extended to customers or elongated collection cycles during those intervals.

Receivables Turnover Ratio

The receivables turnover ratio demonstrates variability that inversely corresponds in part to the trade accounts receivable trends. Early data is missing, but from December 2020 onwards, it exhibited relatively high values, peaking at 9.16 in April 2022, suggesting efficient collection during that quarter. However, following this peak, the ratio declined steadily to around 4.18 in March 2025, indicating a slowing in the rate of collection or possibly increased receivables outstanding. Subsequent periods show mild recovery but remain below earlier highs, implying a somewhat reduced efficiency in receivables management over time.

In summary, revenues experienced robust growth punctuated by significant volatility, while trade receivables mirrored this with large swings possibly reflecting credit policy or market demand changes. The receivables turnover ratio’s decreasing trend in later periods flags a reduction in collection efficiency, potentially impacting liquidity. Together, these trends highlight dynamic financial conditions with implications for working capital management and operational performance over the reported quarters.

The cost of sales exhibits considerable volatility over the observed periods. Initially, there is a moderate level around 1,940 million US dollars in early 2020, followed by a noticeable dip in mid-2020, and then a significant increase towards the end of 2020 and through 2021, peaking near 9,932 million US dollars in late 2021. After this peak, the values fluctuate markedly, with sharp declines and rises, ending with a lower figure of approximately 3,778 million US dollars by mid-2025. Overall, the trend indicates sporadic fluctuations with no clear sustained increase or decrease across the entire timeframe.

Trade accounts payable display a more consistent upward trajectory over the course of the data. Starting from about 3,972 million US dollars in early 2020, the figures increase steadily, reaching a peak of roughly 6,809 million US dollars by the end of 2022. A slight decline follows in 2023, with some variability thereafter, but the levels remain generally elevated in comparison to the initial periods, concluding above 5,000 million US dollars by mid-2025. This suggests a rising reliance on or accumulation of payables over time.

The payables turnover ratio, available from late 2020 onward, shows marked changes across the quarters. The ratio begins at approximately 2.02 and increases sharply to 5.53 by the end of 2021, indicating accelerated payment practices or improved efficiency in managing payables during this period. Subsequently, the ratio fluctuates between approximately 3.17 and 6.66, with no sustained trend upward or downward. This variability suggests changes in payment cycles or management tactics across quarters without a consistent directional pattern.

Cost of Sales

Highly variable with peak values in late 2021; overall no clear long-term trend.

Trade Accounts Payable

Generally rising trend, reflecting increasing amounts owed to suppliers with some episodic declines.

Payables Turnover Ratio

Significant fluctuations, rising sharply in 2021, then varying widely, showing inconsistent payables management efficiency.

Working Capital

The working capital exhibits significant fluctuations across the periods. Initially, it was moderately positive at 848 million US dollars, then surged sharply to over 13 billion in mid-2020. Afterward, it showed a pattern of rises and falls, peaking at nearly 43 billion in the last quarters of 2023, followed by a steep decline into negative territory at the end of 2023. In 2024 and 2025, the working capital oscillates between small positive and negative values, with no clear sustained trend emerging. This volatility indicates dynamic changes in current assets and liabilities, likely reflecting operational adjustments or shifts in financing strategies over time.

Revenues

Revenues have generally trended upward from approximately 10 billion US dollars in early 2020 to a peak exceeding 27 billion in mid-2022. Following this peak, there is a noticeable decline throughout late 2022 and into 2023, with revenues dropping as low as around 13 billion. In 2024 and 2025, revenues appear to recover modestly but remain below their historical peak levels, fluctuating between roughly 13 and 18 billion. This pattern suggests cyclical or market-driven factors impacting sales, with a strong growth phase followed by contraction and partial recovery.

Working Capital Turnover

The working capital turnover ratio, available from late 2020 onward, shows a wide range of variability. Early values range from approximately 3.6 to 6.1, indicating moderate efficiency in generating revenues from working capital during this period. Subsequently, there is an anomalous jump to very high ratios, such as 11.0, 29.17, and even 5036 in isolated periods, which may indicate irregularities or distortions caused by extreme values in working capital or revenues. The latter part of the timeline shows further elevated but fluctuating turnover ratios in the range of 6.64 to 10.68. Overall, this ratio reflects inconsistent usage of working capital relative to revenue, with some periods demonstrating strong turnover efficiency and others likely impacted by abnormal data points or significant balance sheet changes.

Summary Insights

The financial trends reveal a company undergoing considerable operational variability. Revenue growth peaks mid-2022, followed by a decline and partial recovery, suggesting external or internal market challenges. Working capital shows substantial volatility, including periods of negative balances, signaling potential liquidity or management issues. The working capital turnover ratio corroborates this, with wide swings that may point to changing efficiency or financial structure. Together, these patterns emphasize the need for close monitoring of liquidity management and revenue stability to support sustained financial health.

The inventory turnover ratio exhibits a clear upward trend from early 2021 through late 2022, increasing from 1.08 to a peak of approximately 3.82. This suggests a significant improvement in the rate at which inventory is sold and replaced during this period. Subsequently, beginning in early 2023, the inventory turnover ratio shows a consistent decline, falling to around 1.52 by mid-2025. This reversal indicates a slowing in inventory velocity towards the later periods.

Correspondingly, the average inventory processing period, measured in days, inversely mirrors the inventory turnover trend. Starting at a high of 338 days, this period shortens sharply through 2021 and 2022, reaching a minimum near 95 days at the beginning of 2023. This shortening implies that inventory was held for fewer days before being processed or sold, reflecting enhanced operational efficiency during that time frame. After early 2023, the trend reverses, with the average processing period lengthening steadily to 239 days by mid-2025, indicating inventory is being held for longer durations again.

The inverse relationship between the inventory turnover ratio and the average inventory processing period throughout the observed periods is consistent with the standard interpretation of these metrics. The initial improvement phase may reflect better inventory management, increased demand, or more efficient supply chain operations. The subsequent decline in turnover and elongation of processing time could point to challenges such as reduced sales velocity, overstocking, or supply chain disruptions.

Overall, the data reveals a pronounced cycle in inventory management effectiveness, with a phase of significant improvement followed by a gradual deterioration toward the end of the period under review. This pattern warrants further investigation to identify underlying causes and to implement measures aimed at restoring optimum inventory turnover rates and minimizing inventory holding periods.

Receivables Turnover

The receivables turnover ratio exhibits variability over the observed periods, beginning at 5.28 and experiencing fluctuations. It increased to a peak of 9.16 before subsequently declining to lower levels around 4.18. Towards the end of the timeframe, the ratio stabilized moderately between 5.27 and 5.55. This suggests periods of more efficient collections intermixed with phases of reduced turnover efficiency.

Average Receivable Collection Period

The average receivable collection period mirrors the inverse movement of the turnover ratio, ranging from 87 days at its highest to 40 days at its lowest. Initially, the collection period was relatively high, then decreased markedly to 40 days during the period corresponding to the highest receivables turnover. Following this, an upward trend is evident, with periods extending again to values around 69 to 74 days towards the end of the data, indicating lengthened collection times.

Overall Trend and Insights

There is a clear inverse relationship between the receivables turnover and the average collection period, as expected. The fluctuations suggest variability in the company's efficiency in collecting receivables, which may be influenced by operational changes, credit policies, or changes in the customer base over time. The recent trend shows a moderate stabilization but at a somewhat lower turnover and longer collection days compared to peaks earlier in the dataset. This could point to emerging challenges in receivables management or changes in sales terms.

The data reveals distinct trends in the inventory processing period, receivable collection period, and the overall operating cycle, reflecting the management of working capital over recent quarters.

Average Inventory Processing Period

The inventory processing period exhibits a significant decline from 338 days in April 2021 to a low of 95 days in April 2023, indicating improved efficiency in inventory turnover during this timeframe. However, from this low point, the period gradually rises again, reaching 239 days by June 2025, suggesting a slowdown in inventory movement or potential buildup of stock towards the end of the observed period.

Average Receivable Collection Period

The receivable collection period shows volatility throughout the timeline. Initially, it increases from 69 days in April 2021 to a peak of 78 days in June 2021, then generally decreases to 40 days by April 2022, reflecting faster customer payments or better receivables management. Subsequently, it fluctuates between approximately 48 and 74 days until December 2024, after which it decreases slightly and stabilizes around 69 days through mid-2025.

Operating Cycle

The operating cycle, representing the total time to convert inventory and receivables into cash, follows the combined trend of the prior two metrics. It declines notably from 407 days in April 2021 to a trough of 135 days by April 2023, indicating improved overall working capital efficiency. Afterward, it increases steadily to 308 days by June 2025, reflecting the extended inventory processing and receivable collection periods observed in the latter quarters.

Overall, the company experienced a period of enhanced operational efficiency until early 2023, characterized by reduced inventory holding and faster receivable collections. This efficiency gains reversed in later periods, as indicated by increasing duration in inventory processing and operating cycles, which may warrant further investigation into inventory management strategies and credit policies to understand underlying causes.

The analysis of the payables turnover ratio and average payables payment period reveals distinct trends over the observed time frame. Initially, the payables turnover ratio demonstrated a notable increase from 2.02 to a peak of 6.66, suggesting a progressively faster rate of payment to suppliers. This rise in turnover indicates improved efficiency in settling payables, reflecting positively on the company's liquidity management during this period.

Subsequently, from the apex in mid-2022, the payables turnover ratio experienced a general downward trend, declining to values around 3.3 to 3.44 by mid-2025. This reduction suggests a deceleration in the rate at which payables were settled, indicating a lengthening credit period or a strategic adjustment to payment timing.

Complementary to these observations, the average payables payment period exhibits an inverse relationship with the payables turnover ratio. Starting at 181 days, this period decreased significantly to a low of 55 days, indicating a shorter duration taken to pay suppliers during the phase of increasing turnover. Following this, the payment period gradually extended again, reaching values above 100 days in the latter recorded periods, consistent with the declining turnover ratio.

Overall, the data reflects an initial period of enhanced payment speed and efficiency, likely aimed at strengthening supplier relationships or capitalizing on early payment discounts. The latter period suggests a strategic shift towards lengthening the payment window, potentially to optimize working capital or respond to changing market conditions. These patterns imply active management of payables in alignment with broader financial strategies.

Payables Turnover Ratio

Increased from around 2.0 to a peak exceeding 6.5, then declined steadily to approximately 3.3 by mid-2025.

Average Payables Payment Period

Decreased from 181 days to as low as 55 days during the initial phase, then increased again to over 100 days towards the end of the period.

Interpretation

The inverse relationship between turnover and payment period suggests dynamic management aiming for improved liquidity and supplier relations initially, followed by a strategic extension of payment durations to better manage cash flow.

The analysis of the quarterly financial metrics reveals varying trends in inventory processing, receivable collection, payables payment periods, and the resulting cash conversion cycle over the observed periods.

Average Inventory Processing Period

The average inventory processing period shows an initial significant decrease, dropping from 338 days to 131 days between April 2021 and December 2020 quarters. This indicates improved efficiency in inventory turnover during this timeframe. Following this decline, the period stabilizes around 99 to 101 days in mid-2022 but then gradually increases again, reaching 239 days by June 2025. This upward trend in later periods suggests a slowdown in inventory turnover or an accumulation of inventory.

Average Receivable Collection Period

The receivable collection period fluctuates modestly within a range of approximately 40 to 78 days. Starting at 69 days, it shows an increase to a peak of 78 days in mid-2020, followed by a decrease to 40 days in early 2023. Subsequently, it trends upward again, reaching values as high as 87 days in late 2024 before returning to around 69 days by mid-2025. This pattern indicates varying efficiency in the collection of receivables, with periods of both tightening and loosening credit collection policies or customer payment behaviors.

Average Payables Payment Period

The payables payment period experiences a marked decline from 181 days to 55 days during the early periods until mid-2022, indicating that the company reduced the time it takes to pay suppliers. However, starting in mid-2022, this period increases again, peaking at 115 days in mid-2025, before slightly decreasing towards the end of the observation period. These changes may reflect shifts in supplier negotiation strategies, liquidity management, or external economic conditions impacting payment terms.

Cash Conversion Cycle

The cash conversion cycle (CCC) exhibits a significant downward trend initially, falling from 226 days to 94 days between early 2020 and mid-2022, reflecting improved working capital efficiency. The CCC then increases steadily, reaching 207 days by mid-2025. The lower CCC periods correspond with reduced inventory and receivable periods coupled with careful management of payables. The subsequent increase suggests a deterioration in cash flow efficiency potentially due to lengthening inventory and receivables collection periods and fluctuating payables payment terms.

Overall, the data illustrates an initial phase of substantial improvement in working capital management, particularly between 2020 and mid-2022, followed by a gradual decline in efficiency in the succeeding periods. This trend warrants further investigation into operational practices, market conditions, or supply chain challenges that might have influenced these financial dynamics.