Patrick James
Corporate Finance
April 2, 2014
Financial Ratio Analysis: Pfizer

*All numbers in 1,000’s

Changes in income statement and balance sheet (Pfizer)

When we take a look at Pfizer’s income statement over the last decade, we see much fluctuation in total revenues. In 2009, Pfizer bottomed out at $50,000, but peaked 2 years later at $67,425. A similar pattern is seen when we look at the firm’s gross profit. It appears as though Pfizer maximizes their revenue and income when operating income is low, and in years where more money is spent on fixed assets and research and development. In essence, the key to Pfizer’s income statement walls in their promotion mix, and if we were to get a glimpse of that we would be able to explain all of these numbers more accurately.

Analysis of ratios

When we first look at the liquidity ratio for Pfizer, we see that the firm has increased the percentage of both the quick ratio and current ratio over the 10-year period by roughly 66%, indicating an increase in assets and a decrease in liabilities. The leverage ratios of the firm tell us that Pfizer has accumulated more debt over the last decade however that debt was highest during year 2007, and has decreased by 25% in the last 5 years. The profitability ratio provides us with information that we can use to see that the cost of Pfizer’s goods has increased steadily over the last decade, while the amount of revenue has stayed relatively even. Finally, the activity ratio tells us that the firm has been decreasing its total inventory turnover, while Pfizer’s asset turnover continues to increase, spurred on perhaps by a deduction in the company’s assets. In addition From there annual 10K SEC filings they are gaining 9.3% on their dividends paid on average over the last decade. Pfizer is a very healthy company at the present time, though according to analysts at