Vertex Pharmaceuticals Inc (VRTX)
Solvency 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.37 | 1.42 | 1.36 | 1.29 | 1.29 | 1.32 | 1.32 | 1.31 | 1.30 | 1.28 | 1.31 | 1.31 | 1.33 | 1.32 | 1.33 | 1.35 | 1.35 | 1.39 | 1.36 | 1.38 |
Vertex Pharmaceuticals Inc has consistently maintained a strong solvency position as evidenced by the stable and low values of its solvency ratios over the years. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all been consistently at 0.00, indicating that the company has no significant debt relative to its total assets, capital, or equity.
The Financial leverage ratio, which reflects the proportion of the company's assets that are financed through debt, has fluctuated slightly over the years but has generally stayed at a manageable level. The ratio ranged from 1.28 to 1.42 during the period under review, with an average of around 1.34. This indicates that Vertex Pharmaceuticals has a moderate level of financial leverage, which is typical for companies in the pharmaceutical industry.
Overall, Vertex Pharmaceuticals Inc's solvency ratios suggest that the company has a solid financial standing, with low debt levels and a reasonable level of financial leverage, which bodes well for its financial stability and ability to meet its obligations as they come due.
Coverage 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -7.61 | -7.04 | -8.34 | 97.27 | 86.89 | 85.96 | 82.79 | 78.86 | 78.60 | 71.21 | 68.15 | 48.33 | 45.23 | 44.81 | 41.02 | 56.81 | 54.60 | 52.77 | 40.26 | 30.99 |
Interest coverage ratio is a financial metric used to evaluate a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense.
In the case of Vertex Pharmaceuticals Inc, the interest coverage ratio has shown a generally positive trend over the periods provided in the data. The ratio increased from 30.99 as of March 31, 2020, to a peak of 97.27 as of March 31, 2024. This indicates that the company's earnings before interest and taxes were sufficient to cover the interest expenses by a significant margin during this period.
However, there was a sharp decline in the interest coverage ratio in the subsequent quarters, with negative values reported for June 30, 2024, September 30, 2024, and December 31, 2024. A negative interest coverage ratio suggests that the company's earnings were insufficient to cover its interest expenses during these periods, which could be a cause for concern regarding its financial health and ability to meet its debt obligations.
It would be important to further investigate the reasons behind the sudden decline in the interest coverage ratio in the latter quarters and monitor the company's financial performance closely to assess its ability to manage its debt effectively in the future.