Stock Analysis on Net
Stock Analysis on Net
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Merck & Co. Inc. (NYSE:MRK)

Cash Flow Statement

Beginner level

The cash flow statement provides information about a company’s cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company’s balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Merck & Co. Inc., consolidated cash flow statement

US$ in millions

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12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income 9,777  6,193  2,418  3,941  4,459 
Depreciation and amortization 3,652  4,519  4,637  5,441  6,375 
Intangible asset impairment charges 1,040  296  646  3,948  162 
Charge for the acquisition of Peloton Therapeutics, Inc. 993  —  —  —  — 
Charge for future payments related to collaboration license options —  650  500  —  — 
Provisional charge for one-time transition tax related to the enactment of U.S. tax legislation —  —  5,347  —  — 
Charge related to the settlement of worldwide Keytruda patent litigation —  —  —  625  — 
Foreign currency devaluation related to Venezuela —  —  —  —  876 
Net charge related to the settlement of Vioxx shareholder class action litigation —  —  —  —  680 
Deferred income taxes (556) (509) (2,621) (1,521) (764)
Share-based compensation 417  348  312  300  299 
Other 184  978  229  243  602 
Accounts receivable 294  (418) 297  (619) (480)
Inventories (508) (911) (145) 206  805 
Trade accounts payable 399  230  254  278  (37)
Accrued and other current liabilities 376  (341) (922) (2,018) (8)
Income taxes payable (2,359) 827  (3,291) 124  (266)
Noncurrent liabilities (237) (266) (123) (809) (277)
Other (32) (674) (1,091) 237  (5)
Net changes in assets and liabilities (2,067) (1,553) (5,021) (2,601) (268)
Adjustments to reconcile net income to net cash provided by operating activities 3,663  4,729  4,029  6,435  7,962 
Net cash provided by operating activities 13,440  10,922  6,447  10,376  12,421 
Capital expenditures (3,473) (2,615) (1,888) (1,614) (1,283)
Purchases of securities and other investments (3,202) (7,994) (10,739) (15,651) (16,681)
Proceeds from sales of securities and other investments 8,622  15,252  15,664  14,353  20,413 
Acquisition of Antelliq Corporation, net of cash acquired (3,620) —  —  —  — 
Acquisition of Peloton Therapeutics, Inc., net of cash acquired (1,040) —  —  —  — 
Dispositions of other businesses, net of cash divested —  —  —  —  316 
Acquisition of Cubist Pharmaceuticals, Inc., net of cash acquired —  —  —  —  (7,598)
Other acquisitions, net of cash acquired (294) (431) (396) (780) (146)
Other 378  102  38  482  221 
Net cash (used in) provided by investing activities (2,629) 4,314  2,679  (3,210) (4,758)
Net change in short-term borrowings (3,710) 5,124  (26) —  (1,540)
Payments on debt —  (4,287) (1,103) (2,386) (2,906)
Proceeds from issuance of debt 4,958  —  —  1,079  7,938 
Purchases of treasury stock (4,780) (9,091) (4,014) (3,434) (4,186)
Dividends paid to stockholders (5,695) (5,172) (5,167) (5,124) (5,117)
Proceeds from exercise of stock options 361  591  499  939  485 
Other (325) (195) (118) 56 
Net cash used in financing activities (8,861) (13,160) (10,006) (9,044) (5,270)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 17  (205) 457  (131) (1,310)
Net increase (decrease) in cash, cash equivalents and restricted cash 1,967  1,871  (423) (2,009) 1,083 
Cash, cash equivalents and restricted cash at beginning of year 7,967  6,096  6,515  8,524  7,441 
Cash, cash equivalents and restricted cash at end of year 9,934  7,967  6,092  6,515  8,524 

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-26).

Cash flow statement item Description The company
Net cash provided by operating activities Amount of cash inflow (outflow) from operating activities, excluding discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities. Merck & Co. Inc.’s net cash provided by operating activities increased from 2017 to 2018 and from 2018 to 2019.
Net cash (used in) provided by investing activities Amount of cash inflow (outflow) of investing activities, excluding discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets. Merck & Co. Inc.’s net cash (used in) provided by investing activities increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.
Net cash used in financing activities Amount of cash inflow (outflow) of financing activities, excluding discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit. Merck & Co. Inc.’s net cash used in financing activities decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.