Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Statement of Comprehensive Income
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- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
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- Analysis of Reportable Segments
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Liquidity Ratios (Summary)
Merck & Co. Inc., liquidity ratios (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).
The analysis of liquidity ratios reveals a period of volatility characterized by cyclical fluctuations in short-term solvency. While the organization generally maintains a current ratio above 1.0, indicating an ability to cover short-term obligations with current assets, there are notable periods of contraction and expansion in liquidity across all measured metrics.
- Current Ratio
- The current ratio remained relatively stable between 1.39 and 1.47 throughout 2022. A moderate decline was observed in 2023, reaching a low of 1.25 by December 2023 and March 2024. Liquidity improved significantly toward the end of 2025, peaking at 1.66 in September 2025, before declining to 1.30 by March 2026.
- Quick Ratio
- The quick ratio reflects a consistent reliance on inventory, as the value remained below 1.0 for the majority of the period. Following a peak of 0.93 in December 2022, the ratio experienced a downward trend, hitting a trough of 0.68 in early 2024. A recovery occurred in late 2025, with the ratio surpassing 1.0 for the first time in September 2025 at 1.06, followed by a sharp decrease to 0.66 by March 2026.
- Cash Ratio
- The cash ratio exhibited the highest degree of volatility. After reaching 0.54 in December 2022, a sustained decline led to a low of 0.22 in March 2024. A substantial increase in cash positions was evident in September 2025, where the ratio peaked at 0.64, followed by a rapid contraction to 0.21 by March 2026.
A strong correlation is observed between the three ratios, with all metrics peaking simultaneously in September 2025 and experiencing a synchronized decline leading into March 2026. The disparity between the current ratio and the quick ratio suggests that inventory levels play a significant role in the overall liquidity profile, particularly during periods where the quick ratio falls significantly below 1.0.
Current Ratio
Merck & Co. Inc., current ratio calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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. | |||||||||||||||||||||||
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).
1 Q1 2026 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of short-term liquidity indicates that the organization maintained a current ratio above 1.00 throughout the observed period from March 2022 to March 2026, signifying a consistent ability to cover short-term obligations with current assets. The liquidity profile exhibited moderate volatility, characterized by a general stability in 2022, a contraction in 2023, and a significant peak in late 2025.
- Current Asset Trajectory
- Current assets displayed a non-linear growth pattern. After an initial increase from 31,184 million USD in March 2022 to 35,722 million USD by December 2022, a decline occurred mid-2023, reaching a period low of 29,977 million USD in June 2023. A substantial recovery followed, culminating in a peak of 47,557 million USD in September 2025 before receding to 35,015 million USD by March 2026.
- Current Liability Management
- Current liabilities remained relatively stable compared to assets, generally fluctuating between 22,000 million USD and 29,000 million USD. A gradual upward trend was observed through 2024, peaking at 29,586 million USD in September 2024. Liabilities then stabilized, ending the period at 26,945 million USD in March 2026, suggesting a controlled approach to short-term debt and operational payables.
- Current Ratio Analysis
- The current ratio fluctuated within a range of 1.25 to 1.66. The ratio remained steady around 1.40 during 2022 but experienced downward pressure throughout 2023, hitting a floor of 1.25 in December 2023 and March 2024. A strong recovery phase was observed throughout 2025, with the ratio reaching its maximum of 1.66 in September 2025, driven primarily by the surge in current assets. The period concluded with a compression of the ratio to 1.30 in March 2026.
The correlation between asset spikes and ratio peaks suggests that liquidity enhancements were driven by asset accumulation rather than a strategic reduction in liabilities. The overall trend demonstrates a resilient liquidity position, although the sharp decline in the ratio between September 2025 and March 2026 indicates a rapid shift in the short-term financial structure.
Quick Ratio
Merck & Co. Inc., quick ratio calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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. | |||||||||||||||||||||||
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).
1 Q1 2026 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The liquidity position of the organization demonstrates significant volatility over the period from March 2022 to March 2026. The ability to cover immediate liabilities using only the most liquid assets has fluctuated, characterized by a period of decline, a temporary peak in late 2025, and a subsequent sharp contraction by the first quarter of 2026.
- Total Quick Assets
- Quick assets exhibited an unstable trajectory, starting at 18,756 million USD in March 2022 and reaching a peak of 30,334 million USD in September 2025. However, a substantial decrease occurred following this peak, with assets falling to 17,912 million USD by March 2026, marking the lowest level of liquid assets within the observed timeframe.
- Current Liabilities
- Short-term obligations showed a general upward trend, increasing from 22,316 million USD in March 2022 to a peak of 29,586 million USD in September 2024. While liabilities moderated slightly in subsequent quarters, they remained elevated relative to the baseline, ending at 26,945 million USD in March 2026.
- Quick Ratio Analysis
- The quick ratio remained below 1.0 for the majority of the analysis period, indicating that the most liquid assets were generally insufficient to cover current liabilities without the inclusion of inventory. A brief period of improvement occurred between March 2022 (0.84) and December 2022 (0.93), followed by a decline to a low of 0.68 in March 2024. A significant recovery was observed in September 2025, where the ratio peaked at 1.06, the only instance where immediate liquidity exceeded short-term obligations. This recovery was short-lived, as the ratio fell sharply to 0.66 by March 2026, representing the lowest liquidity threshold in the data set.
Cash Ratio
Merck & Co. Inc., cash ratio calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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. | |||||||||||||||||||||||
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).
1 Q1 2026 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of the cash ratio over the period from March 2022 to March 2026 reveals a pattern of significant volatility in immediate liquidity. The cash ratio, which measures the ability to cover current liabilities using only cash and cash equivalents, fluctuated between a maximum of 0.64 and a minimum of 0.21.
- Cash Asset Volatility
- Total cash assets exhibited sharp fluctuations throughout the observed period, ranging from a low of 5,619 million USD in March 2024 to a peak of 18,214 million USD in September 2025. These fluctuations serve as the primary driver for the variance in the liquidity ratio.
- Current Liabilities Trend
- Current liabilities maintained a relatively stable but gradual upward trajectory, increasing from 22,316 million USD in March 2022 to 26,945 million USD by March 2026. A peak in liabilities was recorded in September 2024 at 29,586 million USD.
- Cash Ratio Phase Analysis
- The liquidity position progressed through several distinct phases: an initial increase peaking at 0.54 in December 2022, a subsequent decline to 0.22 by March 2024, a recovery phase that peaked at 0.64 in September 2025, and a final sharp contraction to 0.21 by March 2026.
The data indicates that immediate liquidity is highly sensitive to periodic changes in cash holdings rather than structural shifts in current liabilities. The sharp decline observed in the final quarter suggests a substantial reduction in cash assets relative to the company's short-term obligations.