Merck & Co. Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income attributable to Merck & Co., Inc.	365)	14,519)	13,049)	7,067)	9,843)
Net (income) loss attributable to noncontrolling interests	12)	7)	13)	15)	(66)
Net noncash charges	14,834)	7,351)	3,899)	7,761)	5,730)
Net changes in assets and liabilities	(2,205)	(2,782)	(3,839)	(4,590)	(2,067)
Net cash provided by operating activities	13,006)	19,095)	13,122)	10,253)	13,440)
Interest paid, net of tax¹	220)	827)	693)	663)	726)
Capital expenditures	(3,863)	(4,388)	(4,448)	(4,684)	(3,473)
Free cash flow to the firm (FCFF)	9,363)	15,534)	9,367)	6,232)	10,693)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ See details »

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Merck & Co. Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Merck & Co. Inc. FCFF increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Merck & Co. Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR¹	80.00%	11.70%	11.00%	19.40%	13.70%
Interest Paid, Net of Tax
Interest paid, before tax	1,100)	937)	779)	822)	841)
Less: Interest paid, tax²	880)	110)	86)	159)	115)
Interest paid, net of tax	220)	827)	693)	663)	726)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ See details »

² 2023 Calculation
Interest paid, tax = Interest paid × EITR
= 1,100 × 80.00% = 880

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Merck & Co. Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	360,299)
Free cash flow to the firm (FCFF)	9,363)
Valuation Ratio
EV/FCFF	38.48
Benchmarks
EV/FCFF, Competitors¹
AbbVie Inc.	13.70
Amgen Inc.	21.08
Bristol-Myers Squibb Co.	8.59
Danaher Corp.	35.83
Eli Lilly & Co.	644.77
Gilead Sciences Inc.	12.16
Johnson & Johnson	18.04
Pfizer Inc.	30.42
Regeneron Pharmaceuticals Inc.	22.51
Thermo Fisher Scientific Inc.	29.45
Zoetis Inc.	41.04
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences	26.48
EV/FCFF, Industry
Health Care	23.19

Based on: 10-K (reporting date: 2023-12-31).

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Merck & Co. Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	354,322)	296,532)	217,996)	212,628)	218,739)
Free cash flow to the firm (FCFF)²	9,363)	15,534)	9,367)	6,232)	10,693)
Valuation Ratio
EV/FCFF³	37.84	19.09	23.27	34.12	20.46
Benchmarks
EV/FCFF, Competitors⁴
AbbVie Inc.	14.89	12.15	13.18	13.95	11.60
Amgen Inc.	22.22	16.01	15.82	14.51	16.05
Bristol-Myers Squibb Co.	9.14	13.87	10.52	11.63	23.39
Danaher Corp.	36.34	25.74	28.25	30.66	37.11
Eli Lilly & Co.	655.33	59.14	38.37	39.01	36.26
Gilead Sciences Inc.	13.41	13.58	8.42	13.60	9.78
Johnson & Johnson	19.30	23.80	21.25	20.75	19.31
Pfizer Inc.	32.24	9.15	8.40	21.74	19.44
Regeneron Pharmaceuticals Inc.	23.99	17.96	9.81	25.74	19.54
Thermo Fisher Scientific Inc.	28.85	31.61	33.14	26.14	28.88
Zoetis Inc.	47.16	54.71	49.22	43.54	47.27
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences	27.50	18.37	16.44	20.25	19.59
EV/FCFF, Industry
Health Care	23.96	18.01	17.46	18.09	18.44

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ See details »

² See details »

³ 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 354,322 ÷ 9,363 = 37.84

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Merck & Co. Inc. EV/FCFF ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Merck & Co. Inc. (NYSE:MRK)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical