Vertex Pharmaceuticals Incorpor — Earnings Quality Grade F
VRTX · Healthcare
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 62 days, change +9 days YoY
AR growth 27.6% exceeds revenue growth 8.9%
Revenue 8.9%, CFFO 837.2%. Cash follows revenue
Expense Quality
Inventory growth 39.9% exceeds COGS 7.9%
CapEx growth -9.8% vs revenue 8.9%. Normal
SG&A/Gross Profit = 16.9%, excellent (<30%)
Gross margin 86.2%, change +0.1pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
FCF $3.2B, FCF/NI = 0.81
Accruals ratio = 1.3%. Low accruals
Cash $6.6B covers debt $2.0B
Balance Sheet Health
Goodwill+Intangibles $1.5B = 8% of equity. Manageable
Debt/EBITDA = 0.4x. Healthy
Other assets grew 23.7% vs revenue 8.9%
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -21% YoY. Normal
Manipulation Score
M-Score = -2.18 (grey zone)
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25