Microsoft Excel LibreOffice Calc

Merck & Co. Inc. (MRK)


Adjusted Financial Ratios

High level of difficulty


Adjusted Financial Ratios (Summary)

Merck & Co. Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Activity
Total Asset Turnover
Reported 0.51 0.46 0.42 0.39 0.43
Adjusted 0.51 0.45 0.42 0.39 0.43
Liquidity
Current Ratio
Reported 1.17 1.33 1.78 1.55 1.77
Adjusted 1.17 1.34 1.77 1.54 1.76
Solvency
Debt to Equity
Reported 0.94 0.71 0.62 0.59 0.44
Adjusted 0.91 0.68 0.56 0.53 0.41
Debt to Capital
Reported 0.48 0.42 0.38 0.37 0.31
Adjusted 0.48 0.40 0.36 0.35 0.29
Financial Leverage
Reported 3.09 2.56 2.38 2.28 2.02
Adjusted 2.90 2.38 2.11 1.99 1.83
Profitability
Net Profit Margin
Reported 14.71% 5.97% 9.85% 11.25% 28.22%
Adjusted 12.09% 1.47% 3.39% 8.61% 15.45%
Return on Equity (ROE)
Reported 23.30% 6.97% 9.78% 9.94% 24.50%
Adjusted 17.89% 1.59% 2.98% 6.65% 12.23%
Return on Assets (ROA)
Reported 7.53% 2.72% 4.11% 4.36% 12.12%
Adjusted 6.16% 0.67% 1.41% 3.35% 6.67%

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).

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Merck & Co. Inc.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Merck & Co. Inc.’s adjusted current ratio deteriorated from 2016 to 2017 and from 2017 to 2018.
Adjusted debt-to-equity ratio A solvency ratio calculated as adjusted total debt divided by adjusted total equity. Merck & Co. Inc.’s adjusted debt-to-equity ratio deteriorated from 2016 to 2017 and from 2017 to 2018.
Adjusted debt-to-capital ratio A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. Merck & Co. Inc.’s adjusted debt-to-capital ratio deteriorated from 2016 to 2017 and from 2017 to 2018.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Merck & Co. Inc.’s adjusted financial leverage increased from 2016 to 2017 and from 2017 to 2018.
Adjusted net profit margin An indicator of profitability, calculated as adjusted comprehensive income divided by total revenue. Merck & Co. Inc.’s adjusted net profit margin deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Adjusted ROE A profitability ratio calculated as adjusted comprehensive income divided by adjusted total equity. Merck & Co. Inc.’s adjusted ROE deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Adjusted ROA A profitability ratio calculated as adjusted comprehensive income divided by adjusted total assets. Merck & Co. Inc.’s adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

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


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Reported
Selected Financial Data (US$ in millions)
Sales 42,294  40,122  39,807  39,498  42,237 
Total assets 82,637  87,872  95,377  101,779  98,335 
Ratio
Total asset turnover1 0.51 0.46 0.42 0.39 0.43
Adjusted
Selected Financial Data (US$ in millions)
Sales 42,294  40,122  39,807  39,498  42,237 
Adjusted total assets2 82,998  88,240  95,407  101,663  97,804 
Ratio
Adjusted total asset turnover3 0.51 0.45 0.42 0.39 0.43

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).

2018 Calculations

1 Total asset turnover = Sales ÷ Total assets
= 42,294 ÷ 82,637 = 0.51

2 Adjusted total assets. See details »

3 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 42,294 ÷ 82,998 = 0.51

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Merck & Co. Inc.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.

Adjusted Current Ratio

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Reported
Selected Financial Data (US$ in millions)
Current assets 25,875  24,766  30,614  29,764  33,173 
Current liabilities 22,206  18,614  17,204  19,203  18,766 
Ratio
Current ratio1 1.17 1.33 1.78 1.55 1.77
Adjusted
Selected Financial Data (US$ in millions)
Adjusted current assets2 25,993  24,931  30,507  29,545  32,449 
Adjusted current liabilities3 22,206  18,614  17,204  19,203  18,397 
Ratio
Adjusted current ratio4 1.17 1.34 1.77 1.54 1.76

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).

2018 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 25,875 ÷ 22,206 = 1.17

2 Adjusted current assets. See details »

3 Adjusted current liabilities. See details »

4 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 25,993 ÷ 22,206 = 1.17

Ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Merck & Co. Inc.’s adjusted current ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

Adjusted Debt to Equity

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Reported
Selected Financial Data (US$ in millions)
Total debt 25,114  24,410  24,842  26,514  21,403 
Total Merck & Co., Inc. stockholders’ equity 26,701  34,336  40,088  44,676  48,647 
Ratio
Debt to equity1 0.94 0.71 0.62 0.59 0.44
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total debt2 26,013  25,186  25,525  27,225  21,997 
Adjusted total Merck & Co., Inc. stockholders’ equity3 28,580  37,127  45,273  51,120  53,352 
Ratio
Adjusted debt to equity4 0.91 0.68 0.56 0.53 0.41

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).

2018 Calculations

1 Debt to equity = Total debt ÷ Total Merck & Co., Inc. stockholders’ equity
= 25,114 ÷ 26,701 = 0.94

2 Adjusted total debt. See details »

3 Adjusted total Merck & Co., Inc. stockholders’ equity. See details »

4 Adjusted debt to equity = Adjusted total debt ÷ Adjusted total Merck & Co., Inc. stockholders’ equity
= 26,013 ÷ 28,580 = 0.91

Ratio Description The company
Adjusted debt-to-equity ratio A solvency ratio calculated as adjusted total debt divided by adjusted total equity. Merck & Co. Inc.’s adjusted debt-to-equity ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

Adjusted Debt to Capital

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Reported
Selected Financial Data (US$ in millions)
Total debt 25,114  24,410  24,842  26,514  21,403 
Total capital 51,815  58,746  64,930  71,190  70,050 
Ratio
Debt to capital1 0.48 0.42 0.38 0.37 0.31
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total debt2 26,013  25,186  25,525  27,225  21,997 
Adjusted total capital3 54,593  62,313  70,798  78,345  75,349 
Ratio
Adjusted debt to capital4 0.48 0.40 0.36 0.35 0.29

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).

2018 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 25,114 ÷ 51,815 = 0.48

2 Adjusted total debt. See details »

3 Adjusted total capital. See details »

4 Adjusted debt to capital = Adjusted total debt ÷ Adjusted total capital
= 26,013 ÷ 54,593 = 0.48

Ratio Description The company
Adjusted debt-to-capital ratio A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. Merck & Co. Inc.’s adjusted debt-to-capital ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Reported
Selected Financial Data (US$ in millions)
Total assets 82,637  87,872  95,377  101,779  98,335 
Total Merck & Co., Inc. stockholders’ equity 26,701  34,336  40,088  44,676  48,647 
Ratio
Financial leverage1 3.09 2.56 2.38 2.28 2.02
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total assets2 82,998  88,240  95,407  101,663  97,804 
Adjusted total Merck & Co., Inc. stockholders’ equity3 28,580  37,127  45,273  51,120  53,352 
Ratio
Adjusted financial leverage4 2.90 2.38 2.11 1.99 1.83

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).

2018 Calculations

1 Financial leverage = Total assets ÷ Total Merck & Co., Inc. stockholders’ equity
= 82,637 ÷ 26,701 = 3.09

2 Adjusted total assets. See details »

3 Adjusted total Merck & Co., Inc. stockholders’ equity. See details »

4 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Merck & Co., Inc. stockholders’ equity
= 82,998 ÷ 28,580 = 2.90

Ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Merck & Co. Inc.’s adjusted financial leverage increased from 2016 to 2017 and from 2017 to 2018.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 6,220  2,394  3,920  4,442  11,920 
Sales 42,294  40,122  39,807  39,498  42,237 
Ratio
Net profit margin1 14.71% 5.97% 9.85% 11.25% 28.22%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc.2 5,114  591  1,350  3,401  6,525 
Sales 42,294  40,122  39,807  39,498  42,237 
Ratio
Adjusted net profit margin3 12.09% 1.47% 3.39% 8.61% 15.45%

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).

2018 Calculations

1 Net profit margin = 100 × Net income attributable to Merck & Co., Inc. ÷ Sales
= 100 × 6,220 ÷ 42,294 = 14.71%

2 Adjusted net income attributable to Merck & Co., Inc.. See details »

3 Adjusted net profit margin = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Sales
= 100 × 5,114 ÷ 42,294 = 12.09%

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted comprehensive income divided by total revenue. Merck & Co. Inc.’s adjusted net profit margin deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 6,220  2,394  3,920  4,442  11,920 
Total Merck & Co., Inc. stockholders’ equity 26,701  34,336  40,088  44,676  48,647 
Ratio
ROE1 23.30% 6.97% 9.78% 9.94% 24.50%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc.2 5,114  591  1,350  3,401  6,525 
Adjusted total Merck & Co., Inc. stockholders’ equity3 28,580  37,127  45,273  51,120  53,352 
Ratio
Adjusted ROE4 17.89% 1.59% 2.98% 6.65% 12.23%

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).

2018 Calculations

1 ROE = 100 × Net income attributable to Merck & Co., Inc. ÷ Total Merck & Co., Inc. stockholders’ equity
= 100 × 6,220 ÷ 26,701 = 23.30%

2 Adjusted net income attributable to Merck & Co., Inc.. See details »

3 Adjusted total Merck & Co., Inc. stockholders’ equity. See details »

4 Adjusted ROE = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Adjusted total Merck & Co., Inc. stockholders’ equity
= 100 × 5,114 ÷ 28,580 = 17.89%

Ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted comprehensive income divided by adjusted total equity. Merck & Co. Inc.’s adjusted ROE deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 6,220  2,394  3,920  4,442  11,920 
Total assets 82,637  87,872  95,377  101,779  98,335 
Ratio
ROA1 7.53% 2.72% 4.11% 4.36% 12.12%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc.2 5,114  591  1,350  3,401  6,525 
Adjusted total assets3 82,998  88,240  95,407  101,663  97,804 
Ratio
Adjusted ROA4 6.16% 0.67% 1.41% 3.35% 6.67%

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).

2018 Calculations

1 ROA = 100 × Net income attributable to Merck & Co., Inc. ÷ Total assets
= 100 × 6,220 ÷ 82,637 = 7.53%

2 Adjusted net income attributable to Merck & Co., Inc.. See details »

3 Adjusted total assets. See details »

4 Adjusted ROA = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Adjusted total assets
= 100 × 5,114 ÷ 82,998 = 6.16%

Ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted comprehensive income divided by adjusted total assets. Merck & Co. Inc.’s adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.