Vertex Pharmaceuticals Inc (VRTX)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover	2.53	2.76	3.05	3.22	3.31	3.29	3.67	3.97	4.51	5.23	5.24	5.53	5.09	4.97	4.95	5.17	5.37	6.00	6.41	7.06
Receivables turnover	6.82	6.05	6.21	5.64	6.27	6.24	6.07	5.91	6.15	6.23	6.21	6.09	6.60	6.42	7.13	6.50	6.94	7.49	6.75	5.64
Payables turnover	7.38	7.52	8.52	7.46	6.70	6.02	6.11	6.57	6.83	15.99	9.73	10.79	9.21	12.96	12.49	12.10	9.71	13.66	13.85	13.12
Working capital turnover	1.82	1.81	1.91	1.07	0.93	0.86	0.90	0.92	0.84	0.89	0.93	0.96	1.01	1.02	1.00	0.96	0.98	1.09	1.09	1.22

The inventory turnover ratio for Vertex Pharmaceuticals Inc has decreased steadily from 7.06 in March 2020 to 2.53 in December 2024. This indicates that the company is selling its inventory less frequently over time, which could potentially indicate inefficiencies in inventory management or slowing sales.

In contrast, the receivables turnover ratio has shown more fluctuation over the same period, ranging from 5.64 to 6.82. This ratio measures how effectively the company is collecting on its receivables, and the fluctuations could suggest changes in the company's credit policies or the payment behavior of its customers.

The payables turnover ratio has also varied significantly, from 6.02 to 15.99. A higher turnover ratio indicates that the company is paying its suppliers more quickly. The substantial changes in this ratio could reflect shifts in payment terms negotiated with suppliers or changes in the company's working capital management strategies.

The working capital turnover ratio has generally decreased from 1.22 in March 2020 to 1.82 in December 2024. This ratio indicates how efficiently the company is using its working capital to generate sales. The decreasing trend may suggest that the company is becoming less efficient in utilizing its working capital over time.

Overall, the activity ratios reveal important insights into Vertex Pharmaceuticals Inc's operational efficiency and management of its assets and liabilities over the analyzed period.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	144.45	132.47	119.51	113.25	110.37	111.06	99.35	92.00	80.98	69.84	69.64	66.05	71.75	73.47	73.70	70.54	68.02	60.86	56.94	51.69
Days of sales outstanding (DSO)	days	53.48	60.38	58.78	64.68	58.21	58.52	60.14	61.78	59.39	58.59	58.78	59.93	55.33	56.83	51.21	56.14	52.57	48.70	54.04	64.77
Number of days of payables	days	49.49	48.56	42.85	48.95	54.51	60.62	59.76	55.57	53.43	22.83	37.50	33.83	39.63	28.17	29.23	30.17	37.57	26.72	26.35	27.82

The Days of Inventory on Hand (DOH) for Vertex Pharmaceuticals Inc show an increasing trend over the years, starting at 51.69 days on March 31, 2020, and peaking at 144.45 days on December 31, 2024. This indicates that the company is holding inventory for a longer period before selling them, which may tie up capital and increase storage costs.

In contrast, the Days of Sales Outstanding (DSO) declined initially from 64.77 days on March 31, 2020, reaching a low of 48.7 days on September 30, 2020, before fluctuating around 60 days in the following years. A decrease in DSO signifies that the company is collecting its accounts receivable faster, which is a positive indicator of efficient cash flow management.

The Number of Days of Payables for Vertex Pharmaceuticals Inc fluctuated over the period. It started at 27.82 days on March 31, 2020, decreased to 22.83 days on September 30, 2022, before increasing to 49.49 days on December 31, 2024. This may suggest changes in the company's payment terms with suppliers.

Overall, the analysis of activity ratios for Vertex Pharmaceuticals Inc shows trends that indicate potential areas for improvement in managing inventory turnover, accounts receivable collection, and accounts payable.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Fixed asset turnover	9.39	10.30	8.56	8.63	11.06	8.54	8.41	8.23	11.18	7.71	7.52	7.11	10.81	6.78	6.48	6.44	11.66	6.44	7.34	6.47
Total asset turnover	0.49	0.48	0.51	0.42	0.43	0.44	0.46	0.48	0.49	0.52	0.53	0.55	0.56	0.56	0.54	0.52	0.52	0.53	0.52	0.54

The Fixed Asset Turnover ratio for Vertex Pharmaceuticals Inc has shown fluctuation over the years, starting at 6.47 in March 2020, peaking at 11.18 in December 2022, and then stabilizing around the 8 to 9 range towards the end of 2024. This ratio indicates the company's ability to generate sales from its fixed assets, with higher ratios generally viewed favorably as it suggests efficient utilization of fixed assets to generate revenue.

On the other hand, the Total Asset Turnover ratio for Vertex Pharmaceuticals Inc has been on a declining trend during the period under review. Starting at 0.54 in March 2020, the ratio decreased consistently, with a slight recovery towards the end of 2024. This ratio reflects the company's efficiency in generating sales revenue from its total assets, both fixed and current. A decreasing trend in this ratio may indicate declining sales relative to the total assets employed.

Overall, Vertex Pharmaceuticals Inc has exhibited strong performance in terms of utilizing its fixed assets to generate sales revenue, as indicated by the relatively high Fixed Asset Turnover ratios. However, the declining trend in the Total Asset Turnover ratios signals a decrease in sales generated from the total assets over the years, which may warrant further investigation into the company's operational efficiency and asset utilization.