Financial statements analysis on Pfizer

Faculty of Business and Economics, The University of Melbourne, 3010 Melbourne, Australia

^* Corresponding author: yutian.wang3@student.unimelb.edu.au

Abstract

Financial reporting is a snapshot of the business activities and financial status of companies and is widely used for various purposes by different stakeholders, including insiders and outsiders of the company. The quality and relevance of the financial reporting made by the company’s managers with mixed incentives largely influenced investment decision-making, resulting in information asymmetry in the capital market. The financial statement analysis (FSA) plays an important part to mitigate the information gap and assists investors in making unbiased investment decisions, which consists of four parts: business strategy analysis, accounting analysis, financial analysis and prospective analysis. This paper analyses inside information from Pfizer Inc. using FSA based on the financial reporting from the financial year of 2019 to 2022 (FY2019 to FY2022) in conjunction with other supplement materials. This paper finds Pfizer primarily takes the product differentiation strategy as its key profit driver, and the related accounting policies and estimations generally reflect the economic reality. The short-term liquidity of Pfizer should be enhanced, and the firm’s market value is overvalued compared to its intrinsic value on December 20, 2022.