Pfizer Inc (PFE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.87 | 5.84 | 5.03 | 2.79 | 3.98 |
| Receivables turnover | 5.23 | 9.16 | 7.08 | 5.25 | 5.74 |
| Payables turnover | 7.39 | 7.70 | 8.17 | 5.22 | 7.24 |
| Working capital turnover | — | 11.00 | 4.78 | 4.55 | — |
Pfizer Inc.'s activity ratios reflect its efficiency in managing its inventory, accounts receivables, payables, and working capital turnover.
- Inventory turnover has decreased from 3.82 in 2022 to 2.45 in 2023, indicating that Pfizer is turning over its inventory at a slower rate. This may suggest potential issues with inventory management or slower sales.
- Receivables turnover has also decreased from 9.16 in 2022 to 5.23 in 2023, indicating that Pfizer is collecting its accounts receivables at a slower pace. This could be a sign of extending more favorable credit terms to customers or difficulties in collecting payments.
- Payables turnover has decreased from 5.04 in 2022 to 3.72 in 2023, showing that Pfizer is taking longer to pay its suppliers. This could be a strategic move to improve cash flow or negotiate better terms with suppliers.
- The working capital turnover was not reported for 2023 and was significantly high at 11.00 in 2022, suggesting that Pfizer efficiently utilized its working capital to generate revenue. However, the lack of data for 2023 hinders a direct comparison.
Overall, these activity ratios provide insights into Pfizer's operational efficiency and effectiveness in managing its resources related to inventory, accounts receivables, payables, and working capital turnover. Further analysis and context are needed to fully understand the implications of the observed trends.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 74.99 | 62.53 | 72.60 | 130.96 | 91.61 |
| Days of sales outstanding (DSO) | days | 69.74 | 39.84 | 51.54 | 69.49 | 63.55 |
| Number of days of payables | days | 49.39 | 47.41 | 44.70 | 69.94 | 50.38 |
Pfizer Inc.'s activity ratios reveal insights into its efficiency in managing inventory, collecting receivables, and paying its suppliers.
1. Days of Inventory on Hand (DOH): Pfizer's DOH has been fluctuating over the past five years, with a significant increase in 2020 and a subsequent decrease in 2021. In 2023, the DOH increased again, indicating that Pfizer may be holding inventory for a longer period before selling it. This could tie up capital and increase storage costs.
2. Days of Sales Outstanding (DSO): Pfizer's DSO has shown variability during the period under review, with a notable increase in 2020 followed by a gradual decline. A lower DSO signifies that Pfizer is collecting its accounts receivable more quickly, which is a positive sign as it indicates efficient management of credit and cash flow.
3. Number of Days of Payables: Pfizer's days of payables have also fluctuated, indicating changes in the company's payment terms and practices. A higher number of days of payables suggests that Pfizer is taking longer to pay its suppliers, which can be beneficial for cash flow management. However, this may strain relationships with suppliers if extended too far.
In conclusion, Pfizer's activity ratios suggest that the company has been managing its inventory, receivables, and payables differently over the years. The recent increase in DOH and DSO could be areas for further investigation to ensure optimal working capital management and operational efficiency.
See also:
Pfizer Inc Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.09 | 6.17 | 5.46 | 3.03 | 3.86 |
| Total asset turnover | 0.26 | 0.51 | 0.45 | 0.27 | 0.30 |
The fixed asset turnover ratio for Pfizer Inc. has seen fluctuations over the past five years, ranging from 3.01 to 6.17. The ratio measures how efficiently the company is utilizing its fixed assets to generate sales. In 2023, the ratio stands at 3.09, indicating that Pfizer generated $3.09 in sales for every $1 invested in fixed assets. The decrease from the previous year could be attributed to various factors such as changes in production capacity or asset utilization.
On the other hand, the total asset turnover ratio reflects Pfizer's ability to generate sales from all its assets, both fixed and current. The ratio has been hovering between 0.27 and 0.51 over the same period. In 2023, the total asset turnover ratio is 0.26, suggesting that Pfizer generated $0.26 in sales for every $1 of total assets. The decrease from the previous year may indicate a slower pace of asset utilization efficiency or changes in the underlying business operations.
Overall, while the fixed asset turnover ratio provides insights into how well Pfizer is managing its fixed assets to generate revenue, the total asset turnover ratio offers a broader view of the company's overall asset utilization efficiency. Understanding these ratios can help investors and analysts evaluate Pfizer's operational performance and efficiency in utilizing its assets to drive revenue growth.