Stock Analysis on Net

Pfizer Inc. (NYSE:PFE)

Financial Reporting Quality: Aggregate Accruals 

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Pfizer Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Operating Assets
Total assets 213,396 226,501 197,205 181,476 154,229
Less: Cash and cash equivalents 1,043 2,853 416 1,944 1,784
Less: Short-term investments 19,434 9,837 22,316 29,125 10,437
Operating assets 192,919 213,811 174,473 150,407 142,008
Operating Liabilities
Total liabilities 124,899 137,213 101,288 104,013 90,756
Less: Short-term borrowings, including current portion of long-term debt 6,946 10,350 2,945 2,241 2,703
Less: Long-term debt, excluding current portion 57,405 61,538 32,884 36,195 37,133
Operating liabilities 60,548 65,325 65,459 65,577 50,920
 
Net operating assets1 132,371 148,486 109,014 84,830 91,088
Balance-sheet-based aggregate accruals2 (16,115) 39,472 24,184 (6,258)
Financial Ratio
Balance-sheet-based accruals ratio3 -11.48% 30.66% 24.95% -7.11%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
AbbVie Inc. 13.10% -22.39% -14.27% -9.69%
Amgen Inc. -10.36% 57.08% 4.07% 0.70%
Bristol-Myers Squibb Co. -3.21% -7.12% -3.86% -13.40%
Danaher Corp. -3.94% 3.48% -1.55% 16.41%
Eli Lilly & Co. 29.18% 28.84% 11.38% 16.60%
Gilead Sciences Inc. -11.79% 1.04% -2.92% -2.34%
Johnson & Johnson 10.61% -21.13% 19.84% 3.75%
Merck & Co. Inc. 6.20% 3.16% 0.46% 25.14%
Regeneron Pharmaceuticals Inc. 25.51% 1.17% 11.07% 43.54%
Thermo Fisher Scientific Inc. 2.28% 4.96% -1.78% 43.38%
Vertex Pharmaceuticals Inc. 42.13% 61.24% 14.07% 18.20%
Balance-Sheet-Based Accruals Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences 1.64% 7.36% 4.84% 6.18%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 4.65% 8.13% 2.80% 4.68%

Based on: 10-K (reporting date: 2024-12-31), 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).

1 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= 192,91960,548 = 132,371

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= 132,371148,486 = -16,115

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -16,115 ÷ [(132,371 + 148,486) ÷ 2] = -11.48%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Pfizer Inc. improved earnings quality from 2023 to 2024.

Cash-Flow-Statement-Based Accruals Ratio

Pfizer Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income attributable to Pfizer Inc. common shareholders 8,031 2,119 31,372 21,979 9,616
Less: Net cash provided by operating activities 12,744 8,700 29,267 32,922 10,586
Less: Net cash (used in) provided by investing activities 2,652 (32,278) (15,783) (22,534) (4,188)
Cash-flow-statement-based aggregate accruals (7,365) 25,697 17,888 11,591 3,218
Financial Ratio
Cash-flow-statement-based accruals ratio1 -5.24% 19.96% 18.46% 13.18%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
AbbVie Inc. 10.32% -24.89% -16.25% -10.28%
Amgen Inc. -11.16% 52.47% 8.81% -12.87%
Bristol-Myers Squibb Co. -4.97% -5.99% -9.10% -12.73%
Danaher Corp. -1.25% 8.20% 1.44% 18.48%
Eli Lilly & Co. 28.52% 28.13% 10.32% 5.30%
Gilead Sciences Inc. -18.05% -0.19% -4.95% -4.86%
Johnson & Johnson 10.58% 13.66% 10.78% 8.23%
Merck & Co. Inc. 5.00% 2.23% 0.61% 29.09%
Regeneron Pharmaceuticals Inc. 12.04% 14.35% 18.61% 49.24%
Thermo Fisher Scientific Inc. 4.71% 3.80% -0.06% 34.69%
Vertex Pharmaceuticals Inc. 43.34% 62.03% -14.45% 1.38%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences 2.07% 9.68% 2.52% 8.19%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 3.21% 8.44% 2.38% 5.78%

Based on: 10-K (reporting date: 2024-12-31), 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).

1 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -7,365 ÷ [(132,371 + 148,486) ÷ 2] = -5.24%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Pfizer Inc. improved earnings quality from 2023 to 2024.