Liquidity ratios measure the company ability to meet its short-term obligations.
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- Balance Sheet: Assets
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
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Liquidity Ratios (Summary)
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Current ratio | ||||||
Quick ratio | ||||||
Cash ratio |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the liquidity ratios over the five-year period reveals notable fluctuations and an overall improvement in the company's short-term financial health.
- Current Ratio
- The current ratio shows a clear upward trend from 1.02 in 2020 to 1.47 in 2022, indicating enhanced ability to cover short-term liabilities with current assets. Despite a decline to 1.25 in 2023, it rebounded to 1.36 in 2024, suggesting maintained liquidity strength over the medium term.
- Quick Ratio
- The quick ratio, which excludes inventories from current assets, also improved significantly from 0.58 in 2020 to 0.93 in 2022. This was followed by a decline to 0.68 in 2023, but it increased again to 0.84 in 2024. This pattern mirrors the current ratio trends and reflects consistent management of liquid assets relative to current liabilities.
- Cash Ratio
- The cash ratio illustrates more volatility, beginning at 0.30 in 2020 and rising to 0.54 in 2022, indicating a stronger cash and cash equivalents position. However, it decreased sharply to 0.28 in 2023 before partially recovering to 0.48 in 2024. This suggests fluctuations in cash holdings, impacting the most conservative measure of liquidity.
Overall, the data demonstrates improved liquidity ratios from 2020 through 2022, pointing to strengthened short-term financial stability. The declines observed in 2023 across all ratios indicate a temporary reduction in liquidity, possibly due to changes in working capital management or increased short-term liabilities. The partial recovery in 2024 suggests that the company has taken steps to restore its liquidity position. The quick ratio consistently remaining below the current ratio throughout the period highlights the presence of inventory and other less liquid current assets in the company's working capital structure.
Current Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Current assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Current ratio1 | ||||||
Benchmarks | ||||||
Current Ratio, Competitors2 | ||||||
AbbVie Inc. | ||||||
Amgen Inc. | ||||||
Bristol-Myers Squibb Co. | ||||||
Danaher Corp. | ||||||
Eli Lilly & Co. | ||||||
Gilead Sciences Inc. | ||||||
Johnson & Johnson | ||||||
Pfizer Inc. | ||||||
Regeneron Pharmaceuticals Inc. | ||||||
Thermo Fisher Scientific Inc. | ||||||
Vertex Pharmaceuticals Inc. | ||||||
Current Ratio, Sector | ||||||
Pharmaceuticals, Biotechnology & Life Sciences | ||||||
Current Ratio, Industry | ||||||
Health Care |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets demonstrated an overall upward trend between 2020 and 2024, starting at 27,764 million US dollars in 2020 and increasing to 38,782 million US dollars by the end of 2024. There was a noticeable rise from 30,266 million in 2021 to a peak of 35,722 million in 2022, followed by a slight dip to 32,168 million in 2023, before climbing again in 2024.
- Current Liabilities
- Current liabilities initially decreased from 27,327 million US dollars in 2020 to 23,872 million in 2021, marking a significant reduction. However, from 2021 onwards, current liabilities showed a gradual increase, reaching 28,420 million US dollars by 2024. This upward movement indicates a moderate rise in short-term obligations over the latter years.
- Current Ratio
- The current ratio improved notably over the five-year period, implying an enhanced short-term liquidity position. Starting at a slight above parity of 1.02 in 2020, the ratio increased to 1.27 in 2021 and further to 1.47 in 2022, indicating a stronger ability to cover current liabilities with current assets. The ratio then declined moderately to 1.25 in 2023 but rebounded to 1.36 in 2024, still maintaining a comfortable liquidity buffer.
- Overall Analysis
- The data suggests the company strengthened its liquidity position between 2020 and 2024, driven primarily by growth in current assets. Although current liabilities fluctuated, their increase from 2021 to 2024 was offset by a proportionally higher increase in current assets, as reflected in the current ratio. The dip in current assets and current ratio in 2023 might indicate temporary pressures or investments affecting liquidity, but recovery in 2024 points to stabilization. The current ratio consistently remained above 1.0 from 2021 onwards, suggesting a generally sound short-term financial position throughout the period.
Quick Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Accounts receivable, net of allowance for doubtful accounts | ||||||
Total quick assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Quick ratio1 | ||||||
Benchmarks | ||||||
Quick Ratio, Competitors2 | ||||||
AbbVie Inc. | ||||||
Amgen Inc. | ||||||
Bristol-Myers Squibb Co. | ||||||
Danaher Corp. | ||||||
Eli Lilly & Co. | ||||||
Gilead Sciences Inc. | ||||||
Johnson & Johnson | ||||||
Pfizer Inc. | ||||||
Regeneron Pharmaceuticals Inc. | ||||||
Thermo Fisher Scientific Inc. | ||||||
Vertex Pharmaceuticals Inc. | ||||||
Quick Ratio, Sector | ||||||
Pharmaceuticals, Biotechnology & Life Sciences | ||||||
Quick Ratio, Industry | ||||||
Health Care |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations in liquidity measures over the five-year period ending December 31, 2024. Quick assets experienced variability with an initial increase from 15,913 million US dollars in 2020 to 22,642 million in 2022, followed by a decline to 17,442 million in 2023 and then a rise again to 23,967 million in 2024. Current liabilities demonstrated a somewhat fluctuating upward trend, dropping from 27,327 million to 23,872 million between 2020 and 2021 but then climbing each subsequent year to reach 28,420 million in 2024.
The quick ratio, which assesses the ability to meet short-term obligations without relying on inventory sales, exhibited corresponding variability reflecting changes in the underlying asset and liability figures. Starting at 0.58 in 2020, it improved to 0.93 in 2022, indicating strengthening liquidity conditions at that point. However, it weakened to 0.68 in 2023 before recovering to 0.84 in 2024. This pattern suggests intermittent fluctuations in short-term financial stability, with 2022 representing the peak liquidity position within the observed timeframe.
- Total Quick Assets
- Showed an overall upward trend with fluctuations, peaking in 2022, dipping in 2023, and rebounding in 2024.
- Current Liabilities
- Displayed a reduction in 2021 followed by consecutive increases through to 2024, reflecting growing short-term obligations.
- Quick Ratio
- Increased steadily until 2022 indicating better liquidity, then declined in 2023 before a partial recovery in 2024, highlighting volatility in quick asset coverage against current liabilities.
Cash Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Total cash assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Cash ratio1 | ||||||
Benchmarks | ||||||
Cash Ratio, Competitors2 | ||||||
AbbVie Inc. | ||||||
Amgen Inc. | ||||||
Bristol-Myers Squibb Co. | ||||||
Danaher Corp. | ||||||
Eli Lilly & Co. | ||||||
Gilead Sciences Inc. | ||||||
Johnson & Johnson | ||||||
Pfizer Inc. | ||||||
Regeneron Pharmaceuticals Inc. | ||||||
Thermo Fisher Scientific Inc. | ||||||
Vertex Pharmaceuticals Inc. | ||||||
Cash Ratio, Sector | ||||||
Pharmaceuticals, Biotechnology & Life Sciences | ||||||
Cash Ratio, Industry | ||||||
Health Care |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals fluctuating trends in the company's liquidity and liabilities over the five-year period.
- Total Cash Assets
- The total cash assets show variability, starting at $8,062 million in 2020 and remaining relatively stable in 2021 at $8,096 million. A significant increase is observed in 2022, rising to $13,192 million. However, this figure declines notably in 2023 to $7,093 million before increasing again to $13,689 million in 2024. This pattern indicates fluctuating cash holdings with substantial increases in alternate years.
- Current Liabilities
- Current liabilities demonstrate a decreasing trend from $27,327 million in 2020 to $23,872 million in 2021, followed by a slight increase to $24,239 million in 2022. Subsequently, liabilities rise further to $25,694 million in 2023 and continue to increase to $28,420 million in 2024. Overall, there is an initial decrease followed by a progressive increase over the period.
- Cash Ratio
- The cash ratio, reflecting liquidity by comparing cash assets to current liabilities, shows notable fluctuations consistent with cash asset trends and changes in current liabilities. It increases from 0.30 in 2020 to 0.34 in 2021, reaching a high of 0.54 in 2022. In 2023, the ratio falls significantly to 0.28, before recovering to 0.48 in 2024. These changes indicate varying degrees of liquidity, with the highest liquidity observed in 2022, a marked decrease in 2023, and partial recovery by 2024.
In summary, the company’s cash resources and liquidity ratios have exhibited significant variability, with peaks in 2022 and 2024 and lows in 2023. Current liabilities initially decreased but have progressively risen towards the end of the period, influencing the overall liquidity position.