Stock Analysis on Net
Stock Analysis on Net

Merck & Co. Inc. (NYSE:MRK)

Analysis of Investments

Microsoft Excel

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Merck & Co. Inc., adjustment to net income attributable to Merck & Co., Inc.

US$ in millions

Microsoft Excel
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. (as reported) 365 14,519 13,049 7,067 9,843
Add: Net unrealized gain (loss) on investments, net of reclassifications — — — (18) 96
Net income attributable to Merck & Co., Inc. (adjusted) 365 14,519 13,049 7,049 9,939

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).

Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

Merck & Co. Inc., adjusted profitability ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 0.61% 24.49% 26.79% 14.72% 21.01%
Adjusted net profit margin 0.61% 24.49% 26.79% 14.69% 21.22%
Return on Equity (ROE)
Reported ROE 0.97% 31.57% 34.17% 27.91% 37.99%
Adjusted ROE 0.97% 31.57% 34.17% 27.84% 38.36%
Return on Assets (ROA)
Reported ROA 0.34% 13.30% 12.35% 7.72% 11.66%
Adjusted ROA 0.34% 13.30% 12.35% 7.70% 11.78%

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).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Merck & Co. Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Merck & Co. Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Merck & Co. Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Merck & Co. Inc., Profitability Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 365 14,519 13,049 7,067 9,843
Sales 60,115 59,283 48,704 47,994 46,840
Profitability Ratio
Net profit margin1 0.61% 24.49% 26.79% 14.72% 21.01%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc. 365 14,519 13,049 7,049 9,939
Sales 60,115 59,283 48,704 47,994 46,840
Profitability Ratio
Adjusted net profit margin2 0.61% 24.49% 26.79% 14.69% 21.22%

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).

2023 Calculations

1 Net profit margin = 100 × Net income attributable to Merck & Co., Inc. ÷ Sales
= 100 × 365 ÷ 60,115 = 0.61%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Sales
= 100 × 365 ÷ 60,115 = 0.61%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Merck & Co. Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 365 14,519 13,049 7,067 9,843
Total Merck & Co., Inc. stockholders’ equity 37,581 45,991 38,184 25,317 25,907
Profitability Ratio
ROE1 0.97% 31.57% 34.17% 27.91% 37.99%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc. 365 14,519 13,049 7,049 9,939
Total Merck & Co., Inc. stockholders’ equity 37,581 45,991 38,184 25,317 25,907
Profitability Ratio
Adjusted ROE2 0.97% 31.57% 34.17% 27.84% 38.36%

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).

2023 Calculations

1 ROE = 100 × Net income attributable to Merck & Co., Inc. ÷ Total Merck & Co., Inc. stockholders’ equity
= 100 × 365 ÷ 37,581 = 0.97%

2 Adjusted ROE = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Total Merck & Co., Inc. stockholders’ equity
= 100 × 365 ÷ 37,581 = 0.97%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Merck & Co. Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 365 14,519 13,049 7,067 9,843
Total assets 106,675 109,160 105,694 91,588 84,397
Profitability Ratio
ROA1 0.34% 13.30% 12.35% 7.72% 11.66%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc. 365 14,519 13,049 7,049 9,939
Total assets 106,675 109,160 105,694 91,588 84,397
Profitability Ratio
Adjusted ROA2 0.34% 13.30% 12.35% 7.70% 11.78%

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).

2023 Calculations

1 ROA = 100 × Net income attributable to Merck & Co., Inc. ÷ Total assets
= 100 × 365 ÷ 106,675 = 0.34%

2 Adjusted ROA = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Total assets
= 100 × 365 ÷ 106,675 = 0.34%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Merck & Co. Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.