Common-Size Income Statement
Quarterly Data
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Merck & Co. Inc. pages available for free this week:
- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Current Ratio since 2005
- Price to Sales (P/S) since 2005
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Merck & Co. Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 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 financial performance over the analyzed period is characterized by strong core gross profitability juxtaposed with extreme volatility in operating expenses, specifically within research and development spending. While the primary revenue-generating activities demonstrate increasing efficiency, the bottom line is subject to significant periodic fluctuations.
- Gross Margin Trends
- A general expansion in gross profit margins is observed. Gross profit increased from 69.90% in March 2021 to a peak of 77.98% in March 2025. This improvement is driven by a reduction in the cost of sales, which trended downward from approximately 30% in early 2021 to a low of 22.02% in March 2025, before a temporary spike to 33.85% in December 2025. The overall trajectory indicates an enhancement in production efficiency or a more favorable product mix.
- Operating Expense Analysis
- Selling, general, and administrative (SG&A) expenses remained relatively stable, generally fluctuating between 14% and 21% of sales, suggesting a disciplined approach to overhead management. In contrast, research and development (R&D) expenditures exhibit extreme volatility. While R&D typically ranges between 16% and 30% of sales, substantial spikes occurred in June 2023 (-88.60%), December 2023 (-65.80%), and March 2026 (-77.32%). These outliers suggest the occurrence of significant one-time investments, milestone payments, or accounting adjustments rather than a steady increase in operational spending.
- Operating and Net Income Volatility
- Operating income and net income mirror the volatility of R&D spending. In quarters with normalized R&D costs, operating margins are robust, frequently exceeding 30%, such as the 37.79% recorded in March 2025. However, the quarters marked by R&D spikes resulted in severe operating losses, with the most significant deficit occurring in June 2023 (-34.34%). This pattern indicates that while the underlying business model is highly profitable, periodic large-scale investments create substantial swings in quarterly net income.
- Taxation and Other Income
- Taxes on income generally ranged between 2% and 6% of sales during profitable quarters, though a tax benefit of 5.60% was recorded in December 2023, coinciding with an operating loss. Other income and expenses remained a minor factor in overall profitability, typically contributing or detracting less than 5% of total sales, with the exception of a -4.45% impact in March 2022.