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Ratios can be calculated from the information shown on a companys financial statements The trends shown over several periods can be used to make inferences about a companys finances and operating efficiency Financial ratios are not only used to make comparisons within a company but also against other businesses in the same industry This report will focus on the financial ratios of Pfizer Inc Pfizer Inc discovers develops manufactures and markets leading prescription medicines for humans and animals and many of the worlds best-known consumer brands Pfizer 2005 Pfizer is the manufacturer of prescription drugs such as Clebrex Lipitor Viagra and Zoloft Financial Ratios for Pfizer Inc from Mergent Online 200420032002 Profitability Ratios Return on Equity 1662514602 Return on Assets 916141981 Return on Investment18171905134433 Gross Margin086078088 Operating Margin 281115213607 Net Profit Margin26677223607 Liquidity Ratios Quick Ratio11389101 Current Ratio15126134 Working CapitaTotal Assets110513 Debt Ratios Total Debt to Equity110916 Long Term Debt to Assets060507 Efficiency Ratios Total AssetsRevenue242614 RevenuesWorking Capital39774352 The meaning of these ratios is as follows Profitability ratios focus on the earnings of a firm Return on equity is a measure of the return on shareholders equity Return on assets measures profitability relative to total assets Return on assets shows what income was generated from the assets of the firm Return on investment shows the profit or loss from investment in a firm It is ideal from an investors standpoint to have this value as high as possible Gross margin shows the portion of each dollar earned as revenue that is gross profit The operating margin measures the companys operating efficiency The operating margin shows how much the company makes from sales before interest and taxes If the operating margin is increasing over time it means that they are making more money per dollar in sales Liquidity ratios are important to creditors Liquid assets are those which can be converted into cash quickly This quick ratio or acid ratio shows if a
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