Merck & Co. Inc. (MRK)

Statement of Cash Flows

Difficulty: Beginner

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

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 Statement of Cash Flows

USD $ in millions

	12 months ended	Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	Net income
	Depreciation and amortization
	Intangible asset impairment charges
	Charge for future payments related to collaboration license options
	Provisional charge for one-time transition tax related to the enactment of U.S. tax legislation
	Charge related to the settlement of worldwide Keytruda patent litigation
	Foreign currency devaluation related to Venezuela
	Net charge related to the settlement of Vioxx shareholder class action litigation
	Gain on divestiture of Merck Consumer Care business
	Gain on AstraZeneca option exercise
	Loss on extinguishment of debt
	Deferred income taxes
	Share-based compensation
	Other
	Accounts receivable
	Inventories
	Trade accounts payable
	Accrued and other current liabilities
	Income taxes payable
	Noncurrent liabilities
	Other
	Net changes in assets and liabilities
	Adjustments to reconcile net income to net cash provided by operating activities
	Net cash provided by operating activities
	Capital expenditures
	Purchases of securities and other investments
	Proceeds from sales of securities and other investments
	Divestiture of Merck Consumer Care business, net of cash divested
	Dispositions of other businesses, net of cash divested
	Proceeds from AstraZeneca option exercise
	Acquisition of Cubist Pharmaceuticals, Inc., net of cash acquired
	Acquisition of Idenix Pharmaceuticals, Inc., net of cash acquired
	Acquisitions of other businesses, net of cash acquired
	Acquisition of Bayer AG collaboration rights
	Other
	Net cash (used in) provided by investing activities
	Net change in short-term borrowings
	Payments on debt
	Proceeds from issuance of debt
	Purchases of treasury stock
	Dividends paid to stockholders
	Other dividends paid
	Proceeds from exercise of stock options
	Other
	Net cash used in financing activities
	Effect of exchange rate changes on cash, cash equivalents and restricted cash
	Net increase (decrease) in cash, cash equivalents and restricted cash
	Cash, cash equivalents and restricted cash at beginning of year
	Cash, cash equivalents and restricted cash at end of year

Based on: 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), 10-K (filing date: 2015-02-27).

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 declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
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 2016 to 2017 and from 2017 to 2018.
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 declined from 2016 to 2017 and from 2017 to 2018.

	Merck & Co. Inc.	Other companies (not purchased previously)
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Relative Valuation
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Analysis
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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality