This paper is a financial analysis of Pfizer, one of the largest pharmaceutical companies in the world.
This paper explains that Pfizer is in a very good financial situation as indicated in the Tables of Solvency and Profitability Measures. The author relates the working capital shows that the asset value is increasing at a greater pace than the liabilities; however, if the the current ratio in 2002 is compared to 2001, there is a slight decrease in its values, which shows us that the current liabilities have slightly increased in value. The paper states that the only possible problem could appear from the company’s tendency to finance its assets from long-term debt, but Pfizer has the power to support interest payment from its income.
Net income has increased by 17 % from 2001 to 2002 and this may seem little if we look at the increase of net income from 2000 to 2001 (109 %!). If we analyze closer the Statement of Income, we will find out however that in 2000, income was low due to merger costs that accounted for $3,223 million, while in 2001 and 2002, these costs are negligible reported to earnings. Thus, we will report or findings by comparing the revenues from 2002 and 2001 and noting that the company has steadily increased its sales and net income, showing no downturn to recession.