Pfizer Inc (PFE)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.91 | 1.22 | 1.40 | 1.35 | 0.88 |
| Quick ratio | 0.71 | 1.33 | 1.68 | 0.78 | 0.49 |
| Cash ratio | 0.47 | 1.07 | 1.41 | 0.47 | 0.26 |
Pfizer Inc.'s liquidity ratios indicate its ability to meet short-term obligations and manage cash effectively. The current ratio, which measures the company's ability to pay off its short-term liabilities with current assets, has been trending downwards over the past five years, from 1.40 in 2021 to 0.91 in 2023. This decrease suggests that Pfizer may be facing challenges in maintaining sufficient current assets to cover its current liabilities, which could potentially impact its short-term financial stability.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, follows a similar decreasing trend, falling from 1.19 in 2021 to 0.69 in 2023. This indicates that Pfizer's ability to quickly cover its short-term obligations with its most liquid assets has deteriorated over the years.
Furthermore, the cash ratio, which represents the proportion of cash and cash equivalents to current liabilities, has also declined over the period under review, dropping from 0.92 in 2021 to 0.46 in 2023. This decreasing trend suggests that Pfizer's ability to meet its short-term obligations solely with cash has weakened, potentially indicating a decrease in the company's cash reserves.
Overall, Pfizer Inc.'s liquidity ratios indicate a concerning trend towards lower liquidity levels over the past five years. Investors and stakeholders may need to closely monitor the company's liquidity position and management strategies to ensure its ability to meet short-term financial obligations and sustain operational efficiency.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 95.35 | 54.97 | 79.44 | 130.52 | 104.78 |
The cash conversion cycle of Pfizer Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased significantly to 120.63 days compared to the previous year's 62.93 days. This indicates that Pfizer took longer to convert its investments in inventory into cash from sales and then to collect the receivables from customers.
In 2022, the cash conversion cycle improved to 62.93 days, reflecting a more efficient management of working capital compared to 2021 when it stood at 92.77 days. This suggests Pfizer was able to reduce the time it took to sell inventory and collect cash from customers during that year.
However, in 2020 and 2019, Pfizer experienced significantly longer cash conversion cycles of 225.99 days and 206.65 days, respectively. These longer cycles indicate that the company faced challenges in efficiently managing its working capital, resulting in a delay in converting investments into cash flow.
Overall, Pfizer's cash conversion cycle has shown variability over the years, with efforts needed to streamline the process and improve working capital management to ensure efficient operations and maximize cash flow.