Common-Size Income Statement
Quarterly Data
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Analysis of Revenues
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Merck & Co. Inc., common-size consolidated income statement (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
The common-size income statement reveals significant fluctuations in Merck & Co.'s profitability and cost structure over the observed period from March 2021 to December 2025. Sales are consistently represented at 100%, allowing for a clear view of the proportional changes in other income statement items. A notable trend is the volatility in research and development expenses, alongside substantial swings in operating income and net income.
- Gross Profit
- Gross profit as a percentage of sales generally remained strong, fluctuating between approximately 66% and 74% throughout most of the period. However, a significant decrease to 66.15% is observed in September 2025, indicating potential pressures on production costs or pricing. The highest gross profit margin was observed in September 2021 at 73.77%.
- Cost of Sales
- Cost of sales exhibited variability, initially decreasing from -30.10% in March 2021 to -26.23% in September 2021, before increasing to -33.83% in March 2022. A substantial increase to -33.85% is seen in September 2025, mirroring the decline in gross profit and suggesting rising input costs. The lowest cost of sales percentage occurred in June 2021 at -27.22%.
- Operating Expenses (SG&A and R&D)
- Selling, general, and administrative expenses remained relatively stable, generally ranging between -14.61% and -20.93% of sales. However, research and development expenses demonstrated considerable volatility. A peak of -37.90% was recorded in June 2021, followed by a substantial decrease to -88.60% in June 2023, and a further increase to -35.19% in September 2024. This suggests significant shifts in investment in innovation and product development. The combined effect of these expenses significantly impacts operating income.
- Operating Income
- Operating income displayed substantial fluctuations. It peaked at 36.61% in September 2021, but experienced a dramatic decline to -34.34% in June 2023. A recovery is observed in subsequent periods, reaching 37.79% in September 2025, but remains below the earlier high. This volatility is likely driven by the combined effects of cost of sales, SG&A, and particularly, research and development expenses.
- Net Income
- Net income mirrored the trends in operating income, with a peak of 34.75% in September 2021 and a significant loss of -39.72% in June 2023. The impact of discontinued operations is visible in earlier periods, but diminishes over time. Net income attributable to Merck & Co., Inc. follows a similar pattern, with a substantial decline in June 2023 and a partial recovery in later periods. The final reported value in December 2025 is 18.07%.
- Other Income/Expense and Taxes
- Other income (expense), net, generally remained within a narrow range of approximately -4.45% to 4.28%, with a notable negative impact in December 2025 at -2.63%. Taxes on income from continuing operations consistently reduced net income, fluctuating between -0.63% and -5.45% of sales. The tax rate appears to be relatively consistent, though the absolute impact varies with pre-tax income.
In summary, the company experienced considerable earnings volatility throughout the analyzed period. While gross profit margins were generally healthy, fluctuations in research and development spending and cost of sales significantly impacted operating and net income. The substantial loss in June 2023 warrants further investigation, and the recent recovery, while positive, does not yet return profitability to earlier levels.