Stock Analysis on Net
Stock Analysis on Net

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

This company has been moved to the archive! The financial data has not been updated since February 15, 2024.

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin 

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Vertex Pharmaceuticals Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2023 20.59% = 15.92% × 1.29
Dec 31, 2022 23.88% = 18.30% × 1.30
Dec 31, 2021 23.19% = 17.44% × 1.33
Dec 31, 2020 31.22% = 23.07% × 1.35
Dec 31, 2019 19.34% = 14.15% × 1.37

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Vertex Pharmaceuticals Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 20.59% = 36.68% × 0.43 × 1.29
Dec 31, 2022 23.88% = 37.20% × 0.49 × 1.30
Dec 31, 2021 23.19% = 30.92% × 0.56 × 1.33
Dec 31, 2020 31.22% = 43.70% × 0.53 × 1.35
Dec 31, 2019 19.34% = 28.27% × 0.50 × 1.37

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in efficiency measured by asset turnover ratio.

Five-Component Disaggregation of ROE

Vertex Pharmaceuticals Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 20.59% = 0.83 × 0.99 × 44.83% × 0.43 × 1.29
Dec 31, 2022 23.88% = 0.78 × 0.99 × 48.01% × 0.49 × 1.30
Dec 31, 2021 23.19% = 0.86 × 0.98 × 36.86% × 0.56 × 1.33
Dec 31, 2020 31.22% = 0.87 × 0.98 × 51.16% × 0.53 × 1.35
Dec 31, 2019 19.34% = 0.84 × 0.96 × 34.91% × 0.50 × 1.37

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in efficiency measured by asset turnover ratio.

Two-Component Disaggregation of ROA

Vertex Pharmaceuticals Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2023 15.92% = 36.68% × 0.43
Dec 31, 2022 18.30% = 37.20% × 0.49
Dec 31, 2021 17.44% = 30.92% × 0.56
Dec 31, 2020 23.07% = 43.70% × 0.53
Dec 31, 2019 14.15% = 28.27% × 0.50

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in asset turnover ratio.

Four-Component Disaggregation of ROA

Vertex Pharmaceuticals Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2023 15.92% = 0.83 × 0.99 × 44.83% × 0.43
Dec 31, 2022 18.30% = 0.78 × 0.99 × 48.01% × 0.49
Dec 31, 2021 17.44% = 0.86 × 0.98 × 36.86% × 0.56
Dec 31, 2020 23.07% = 0.87 × 0.98 × 51.16% × 0.53
Dec 31, 2019 14.15% = 0.84 × 0.96 × 34.91% × 0.50

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Vertex Pharmaceuticals Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2023 36.68% = 0.83 × 0.99 × 44.83%
Dec 31, 2022 37.20% = 0.78 × 0.99 × 48.01%
Dec 31, 2021 30.92% = 0.86 × 0.98 × 36.86%
Dec 31, 2020 43.70% = 0.87 × 0.98 × 51.16%
Dec 31, 2019 28.27% = 0.84 × 0.96 × 34.91%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in net profit margin ratio over 2023 year is the decrease in operating profitability measured by EBIT margin ratio.