Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Merck & Co. Inc., solvency ratios
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).
- Debt to Equity Ratios
- The debt to equity ratio exhibits a declining trend from 1.26 in 2020 to 0.67 in 2022, indicating a reduction in leverage relative to shareholders' equity during this period. However, this ratio increased again to 0.93 in 2023 before slightly decreasing to 0.8 in 2024. When including operating lease liabilities, a similar pattern is observed, with ratios closely mirroring the standard debt to equity values but marginally higher.
- Debt to Capital Ratios
- Debt to capital ratios, both standard and including operating lease liabilities, show a consistent downward movement from 0.56/0.57 in 2020 to 0.40/0.41 in 2022. A moderate increase occurs in 2023 to 0.48/0.49, followed by a decrease in 2024 to 0.44/0.45. These fluctuations suggest periods of leveraging and deleveraging activities respectively.
- Debt to Assets Ratios
- Debt to assets ratios steadily decline from 0.35 (or 0.37 including leases) in 2020 to 0.28/0.29 in 2022, indicating a gradual reduction in total liabilities relative to total assets. This is followed by a slight increase in 2023 to 0.33/0.34, remaining relatively stable in 2024 around 0.32/0.33, reflecting a modest rise in overall indebtedness relative to assets during the latter years.
- Financial Leverage
- Financial leverage shows a similar downward trend from 3.62 in 2020 to 2.37 in 2022, suggesting a reduced reliance on debt financing compared to equity. There is an increase in 2023 to 2.84, followed by a decrease to 2.53 in 2024. This pattern aligns with the fluctuations observed in debt ratios, pointing to phases of varying capital structure strategies.
- Interest Coverage Ratios
- Interest coverage ratios remain strong and stable between 2020 and 2022, with values around 11 to 18, indicating robust ability to meet interest expenses. A sharp decline occurs in 2023, falling to 2.65, implying a significant reduction in earnings relative to interest obligations. However, the ratio rebounds to 16.69 in 2024, signaling restored earnings capacity to cover interest expenses.
- Fixed Charge Coverage Ratios
- Fixed charge coverage ratios follow a similar trend to interest coverage, improving from 8.47 in 2020 to 13.69 in 2022, reflecting strong coverage of fixed financial obligations. A substantial drop to 2.27 in 2023 indicates weakened coverage, followed by recovery to 13.31 in 2024, consistent with improved financial health and operational performance.
Debt Ratios
Coverage Ratios
Debt to Equity
Merck & Co. Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Loans payable and current portion of long-term debt | 2,649) | 1,372) | 1,946) | 2,412) | 6,431) | |
| Long-term debt, excluding current portion | 34,462) | 33,683) | 28,745) | 30,690) | 25,360) | |
| Total debt | 37,111) | 35,055) | 30,691) | 33,102) | 31,791) | |
| Total Merck & Co., Inc. stockholders’ equity | 46,313) | 37,581) | 45,991) | 38,184) | 25,317) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.80 | 0.93 | 0.67 | 0.87 | 1.26 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| AbbVie Inc. | 20.19 | 5.73 | 3.67 | 4.98 | 6.58 | |
| Amgen Inc. | 10.23 | 10.37 | 10.64 | 4.97 | 3.51 | |
| Bristol-Myers Squibb Co. | 3.04 | 1.35 | 1.27 | 1.24 | 1.34 | |
| Danaher Corp. | 0.32 | 0.34 | 0.39 | 0.49 | 0.53 | |
| Eli Lilly & Co. | 2.37 | 2.34 | 1.52 | 1.88 | 2.94 | |
| Gilead Sciences Inc. | 1.38 | 1.09 | 1.19 | 1.27 | 1.73 | |
| Johnson & Johnson | 0.51 | 0.43 | 0.52 | 0.46 | 0.56 | |
| Pfizer Inc. | 0.73 | 0.81 | 0.37 | 0.50 | 0.63 | |
| Regeneron Pharmaceuticals Inc. | 0.09 | 0.10 | 0.12 | 0.14 | 0.24 | |
| Thermo Fisher Scientific Inc. | 0.63 | 0.75 | 0.78 | 0.85 | 0.63 | |
| Vertex Pharmaceuticals Inc. | 0.01 | 0.02 | 0.03 | 0.06 | 0.07 | |
| Debt to Equity, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.04 | 0.97 | 0.80 | 0.93 | 1.12 | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.87 | 0.82 | 0.73 | 0.79 | 0.92 | |
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
Debt to equity = Total debt ÷ Total Merck & Co., Inc. stockholders’ equity
= 37,111 ÷ 46,313 = 0.80
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows fluctuations over the five-year period. It initially increases slightly from 31,791 million US dollars in 2020 to 33,102 million in 2021. It then decreases to 30,691 million in 2022, followed by a rise to 35,055 million in 2023 and further to 37,111 million in 2024. Overall, the total debt ends higher in 2024 compared to 2020, indicating an increased leverage in absolute terms during this timeframe.
- Total Stockholders’ Equity
- The stockholders’ equity experiences significant changes. It exhibits a strong upward trend from 25,317 million US dollars in 2020 to 38,184 million in 2021, continuing to increase further to 45,991 million in 2022. However, this growth is interrupted by a decline in 2023 to 37,581 million, before rising again to 46,313 million in 2024. This volatility reflects periods of both strong equity accumulation and equity reduction, with the 2024 equity level surpassing the 2020 base.
- Debt to Equity Ratio
- The debt to equity ratio declines steadily from 1.26 in 2020 to 0.87 in 2021 and further to 0.67 in 2022, signifying an improvement in financial leverage and a strengthening equity base relative to debt. In 2023, the ratio increases again to 0.93, indicating a relative rise in debt compared to equity, before decreasing to 0.80 in 2024. Despite some fluctuation, the ratio of 0.80 in 2024 remains substantially lower than the initial level in 2020, suggesting a general trend toward reduced financial risk over the period.
Debt to Equity (including Operating Lease Liability)
Merck & Co. Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Loans payable and current portion of long-term debt | 2,649) | 1,372) | 1,946) | 2,412) | 6,431) | |
| Long-term debt, excluding current portion | 34,462) | 33,683) | 28,745) | 30,690) | 25,360) | |
| Total debt | 37,111) | 35,055) | 30,691) | 33,102) | 31,791) | |
| Current operating lease liability (included in Accrued and other current liabilities) | 282) | 285) | 281) | 304) | 300) | |
| Noncurrent operating lease liability (included in Other noncurrent liabilities) | 877) | 928) | 1,013) | 1,225) | 1,362) | |
| Total debt (including operating lease liability) | 38,270) | 36,268) | 31,985) | 34,631) | 33,453) | |
| Total Merck & Co., Inc. stockholders’ equity | 46,313) | 37,581) | 45,991) | 38,184) | 25,317) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.83 | 0.97 | 0.70 | 0.91 | 1.32 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 20.46 | 5.82 | 3.72 | 5.03 | 6.66 | |
| Amgen Inc. | 10.36 | 10.50 | 10.83 | 5.07 | 3.55 | |
| Bristol-Myers Squibb Co. | 3.13 | 1.41 | 1.31 | 1.27 | 1.37 | |
| Danaher Corp. | 0.35 | 0.37 | 0.41 | 0.52 | 0.56 | |
| Eli Lilly & Co. | 2.45 | 2.44 | 1.59 | 1.96 | 3.06 | |
| Gilead Sciences Inc. | 1.41 | 1.12 | 1.22 | 1.30 | 1.76 | |
| Johnson & Johnson | 0.53 | 0.44 | 0.53 | 0.47 | 0.57 | |
| Pfizer Inc. | 0.76 | 0.84 | 0.41 | 0.54 | 0.65 | |
| Regeneron Pharmaceuticals Inc. | 0.10 | 0.11 | 0.12 | 0.15 | 0.25 | |
| Thermo Fisher Scientific Inc. | 0.66 | 0.78 | 0.82 | 0.89 | 0.65 | |
| Vertex Pharmaceuticals Inc. | 0.11 | 0.05 | 0.06 | 0.10 | 0.11 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.07 | 1.00 | 0.83 | 0.96 | 1.15 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.92 | 0.87 | 0.78 | 0.85 | 0.98 | |
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
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Merck & Co., Inc. stockholders’ equity
= 38,270 ÷ 46,313 = 0.83
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt showed a fluctuating pattern over the observed periods. Initially, there was a slight increase from 33,453 million USD in 2020 to 34,631 million USD in 2021, followed by a decline to 31,985 million USD in 2022. However, from 2022 onward, the debt levels trended upward again, reaching 36,268 million USD in 2023 and further increasing to 38,270 million USD in 2024. This indicates a recent buildup in leverage after a temporary reduction.
- Total stockholders’ equity
- Stockholders’ equity experienced a general upward trend over the analyzed timeframe. It rose significantly from 25,317 million USD in 2020 to 38,184 million USD in 2021, then to 45,991 million USD in 2022, demonstrating strong growth over these years. Despite a dip to 37,581 million USD in 2023, equity rebounded sharply to 46,313 million USD in 2024, nearly returning to the previous peak. This suggests some volatility but an overall strengthening of equity capital.
- Debt to equity ratio (including operating lease liability)
- The debt to equity ratio reflected a declining trend initially, moving from 1.32 in 2020 down to 0.91 in 2021, and further to 0.7 in 2022, indicating a reduction in relative financial leverage and an improvement in the company’s equity base compared to its debt levels. However, this ratio increased again to 0.97 in 2023, suggesting greater leverage that year, before improving to 0.83 in 2024. Overall, the ratio moved towards reduced leverage, despite some fluctuations, signaling a cautious approach to debt relative to equity.
Debt to Capital
Merck & Co. Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Loans payable and current portion of long-term debt | 2,649) | 1,372) | 1,946) | 2,412) | 6,431) | |
| Long-term debt, excluding current portion | 34,462) | 33,683) | 28,745) | 30,690) | 25,360) | |
| Total debt | 37,111) | 35,055) | 30,691) | 33,102) | 31,791) | |
| Total Merck & Co., Inc. stockholders’ equity | 46,313) | 37,581) | 45,991) | 38,184) | 25,317) | |
| Total capital | 83,424) | 72,636) | 76,682) | 71,286) | 57,108) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.44 | 0.48 | 0.40 | 0.46 | 0.56 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| AbbVie Inc. | 0.95 | 0.85 | 0.79 | 0.83 | 0.87 | |
| Amgen Inc. | 0.91 | 0.91 | 0.91 | 0.83 | 0.78 | |
| Bristol-Myers Squibb Co. | 0.75 | 0.57 | 0.56 | 0.55 | 0.57 | |
| Danaher Corp. | 0.24 | 0.26 | 0.28 | 0.33 | 0.35 | |
| Eli Lilly & Co. | 0.70 | 0.70 | 0.60 | 0.65 | 0.75 | |
| Gilead Sciences Inc. | 0.58 | 0.52 | 0.54 | 0.56 | 0.63 | |
| Johnson & Johnson | 0.34 | 0.30 | 0.34 | 0.31 | 0.36 | |
| Pfizer Inc. | 0.42 | 0.45 | 0.27 | 0.33 | 0.39 | |
| Regeneron Pharmaceuticals Inc. | 0.08 | 0.09 | 0.11 | 0.13 | 0.20 | |
| Thermo Fisher Scientific Inc. | 0.39 | 0.43 | 0.44 | 0.46 | 0.39 | |
| Vertex Pharmaceuticals Inc. | 0.01 | 0.02 | 0.03 | 0.05 | 0.06 | |
| Debt to Capital, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.51 | 0.49 | 0.44 | 0.48 | 0.53 | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.47 | 0.45 | 0.42 | 0.44 | 0.48 | |
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
Debt to capital = Total debt ÷ Total capital
= 37,111 ÷ 83,424 = 0.44
2 Click competitor name to see calculations.
The financial data reveals several key trends regarding the company's leverage and capital structure over the five-year period ending December 31, 2024.
- Total debt
- The total debt amount shows variability across the years. Initially, there was a moderate increase from 31,791 million USD in 2020 to 33,102 million USD in 2021. This was followed by a reduction in 2022 to 30,691 million USD, after which the debt level rose again in 2023 and 2024 to 35,055 million USD and 37,111 million USD respectively. This pattern indicates a fluctuating but generally upward trajectory in debt levels over the period.
- Total capital
- Total capital consistently increased over the five years, expanding from 57,108 million USD in 2020 to 83,424 million USD in 2024. The most notable growth occurred between 2020 and 2022, with capital rising by nearly 19,500 million USD, followed by some contraction in 2023 before reaching the highest level in 2024. This reflects an overall strengthening of the company's capital base.
- Debt to capital ratio
- The debt to capital ratio exhibits a generally declining trend, falling from 0.56 in 2020 to 0.40 in 2022. This decline suggests an improvement in the company's leverage position during this period. However, the ratio increased again in 2023 to 0.48, indicating a temporary rise in leverage, before decreasing to 0.44 in 2024. Despite these fluctuations, the ratio in 2024 remains below the initial 2020 level, implying a more balanced capital structure overall.
In summary, the company demonstrates an expanding capital base and fluctuating but moderately increasing debt levels. The debt to capital ratio reflects a general improvement in leverage management with a temporary reversal in 2023, ultimately showing a lower ratio in 2024 compared to 2020. This suggests a trend towards a more conservative financial structure over the timeframe analyzed.
Debt to Capital (including Operating Lease Liability)
Merck & Co. Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Loans payable and current portion of long-term debt | 2,649) | 1,372) | 1,946) | 2,412) | 6,431) | |
| Long-term debt, excluding current portion | 34,462) | 33,683) | 28,745) | 30,690) | 25,360) | |
| Total debt | 37,111) | 35,055) | 30,691) | 33,102) | 31,791) | |
| Current operating lease liability (included in Accrued and other current liabilities) | 282) | 285) | 281) | 304) | 300) | |
| Noncurrent operating lease liability (included in Other noncurrent liabilities) | 877) | 928) | 1,013) | 1,225) | 1,362) | |
| Total debt (including operating lease liability) | 38,270) | 36,268) | 31,985) | 34,631) | 33,453) | |
| Total Merck & Co., Inc. stockholders’ equity | 46,313) | 37,581) | 45,991) | 38,184) | 25,317) | |
| Total capital (including operating lease liability) | 84,583) | 73,849) | 77,976) | 72,815) | 58,770) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.45 | 0.49 | 0.41 | 0.48 | 0.57 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 0.95 | 0.85 | 0.79 | 0.83 | 0.87 | |
| Amgen Inc. | 0.91 | 0.91 | 0.92 | 0.84 | 0.78 | |
| Bristol-Myers Squibb Co. | 0.76 | 0.58 | 0.57 | 0.56 | 0.58 | |
| Danaher Corp. | 0.26 | 0.27 | 0.29 | 0.34 | 0.36 | |
| Eli Lilly & Co. | 0.71 | 0.71 | 0.61 | 0.66 | 0.75 | |
| Gilead Sciences Inc. | 0.59 | 0.53 | 0.55 | 0.56 | 0.64 | |
| Johnson & Johnson | 0.35 | 0.31 | 0.35 | 0.32 | 0.36 | |
| Pfizer Inc. | 0.43 | 0.46 | 0.29 | 0.35 | 0.39 | |
| Regeneron Pharmaceuticals Inc. | 0.09 | 0.10 | 0.11 | 0.13 | 0.20 | |
| Thermo Fisher Scientific Inc. | 0.40 | 0.44 | 0.45 | 0.47 | 0.40 | |
| Vertex Pharmaceuticals Inc. | 0.10 | 0.04 | 0.06 | 0.09 | 0.10 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.52 | 0.50 | 0.45 | 0.49 | 0.54 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.48 | 0.47 | 0.44 | 0.46 | 0.50 | |
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
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 38,270 ÷ 84,583 = 0.45
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt shows fluctuations over the analyzed period. Beginning at 33,453 million US dollars in 2020, it increased slightly to 34,631 million in 2021. However, in 2022, total debt decreased to 31,985 million before rising again to 36,268 million in 2023, and further to 38,270 million in 2024. The overall trend indicates a modest increase in total debt from 2020 to 2024, with an intermediate dip observed in 2022.
- Total Capital (including operating lease liability)
- Total capital exhibited a generally upward trend, increasing significantly from 58,770 million US dollars in 2020 to 72,815 million in 2021. The upward momentum continued with capital reaching 77,976 million in 2022. The figure dipped slightly to 73,849 million in 2023 but rebounded strongly to 84,583 million in 2024. These movements reflect an overall growth in the capital base over the five-year period, despite some short-term variability.
- Debt to Capital Ratio (including operating lease liability)
- The debt-to-capital ratio declined steadily from 0.57 in 2020 to 0.41 in 2022, indicating reduced leverage and a lower proportion of debt in the capital structure during this period. However, the ratio increased again to 0.49 in 2023 before decreasing to 0.45 in 2024. This sequence suggests that leverage was reduced initially but then increased somewhat in 2023, followed by a partial reduction in 2024. Overall, the company maintained a moderate level of leverage, with some variability across the years.
- Summary
- The financial data reveal a company managing its capital structure dynamically over the period. While total debt experienced fluctuations, total capital mostly increased, indicating growth in financing resources. The decreasing trend in the debt-to-capital ratio until 2022 implies improving solvency or a strategic move toward less reliance on debt financing. Subsequent changes in 2023 and 2024 suggest adjustments to leverage in response to operational or market conditions. The interplay between rising capital and fluctuating debt levels highlights ongoing efforts to balance growth ambitions with financial stability.
Debt to Assets
Merck & Co. Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Loans payable and current portion of long-term debt | 2,649) | 1,372) | 1,946) | 2,412) | 6,431) | |
| Long-term debt, excluding current portion | 34,462) | 33,683) | 28,745) | 30,690) | 25,360) | |
| Total debt | 37,111) | 35,055) | 30,691) | 33,102) | 31,791) | |
| Total assets | 117,106) | 106,675) | 109,160) | 105,694) | 91,588) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.32 | 0.33 | 0.28 | 0.31 | 0.35 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| AbbVie Inc. | 0.50 | 0.44 | 0.46 | 0.52 | 0.57 | |
| Amgen Inc. | 0.65 | 0.67 | 0.60 | 0.54 | 0.52 | |
| Bristol-Myers Squibb Co. | 0.54 | 0.42 | 0.41 | 0.41 | 0.43 | |
| Danaher Corp. | 0.21 | 0.22 | 0.23 | 0.27 | 0.28 | |
| Eli Lilly & Co. | 0.43 | 0.39 | 0.33 | 0.35 | 0.36 | |
| Gilead Sciences Inc. | 0.45 | 0.40 | 0.40 | 0.39 | 0.46 | |
| Johnson & Johnson | 0.20 | 0.18 | 0.21 | 0.19 | 0.20 | |
| Pfizer Inc. | 0.30 | 0.32 | 0.18 | 0.21 | 0.26 | |
| Regeneron Pharmaceuticals Inc. | 0.07 | 0.08 | 0.09 | 0.11 | 0.16 | |
| Thermo Fisher Scientific Inc. | 0.32 | 0.35 | 0.35 | 0.37 | 0.31 | |
| Vertex Pharmaceuticals Inc. | 0.01 | 0.02 | 0.03 | 0.04 | 0.05 | |
| Debt to Assets, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.35 | 0.34 | 0.31 | 0.32 | 0.36 | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.31 | 0.30 | 0.28 | 0.29 | 0.31 | |
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
Debt to assets = Total debt ÷ Total assets
= 37,111 ÷ 117,106 = 0.32
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits a fluctuating trend over the five-year span. It increased from 31,791 million USD in 2020 to 33,102 million USD in 2021, then decreased to 30,691 million USD in 2022. Subsequently, it rose again to 35,055 million USD in 2023 and further to 37,111 million USD in 2024, indicating an overall upward movement with intermittent decline.
- Total Assets
- Total assets demonstrated growth from 91,588 million USD in 2020 to 105,694 million USD in 2021, continuing to increase to 109,160 million USD in 2022. A slight dip was observed in 2023, with total assets falling to 106,675 million USD, followed by a notable rise to 117,106 million USD in 2024. The trend shows general asset growth over the period, interrupted by a minor decrease in the fourth year.
- Debt to Assets Ratio
- The debt to assets ratio decreased steadily from 0.35 in 2020 to 0.31 in 2021 and further to 0.28 in 2022, reflecting a relative improvement in the capital structure with lower indebtedness relative to assets. However, this ratio increased again to 0.33 in 2023 before slightly declining to 0.32 in 2024, suggesting some variability but remaining below the initial 2020 level.
- Summary Insights
- Overall, the data reveal that while the company increased its total debt in recent years, total assets also grew, leading to a generally stable debt to assets ratio with some fluctuations. The initial decreasing trend in debt to assets ratio indicates an improving leverage position through 2022, but the ratio’s rise in 2023 signals an increase in leverage before stabilizing somewhat in 2024. The increase in total debt combined with growing assets suggests ongoing investments or financing activities that slightly alter the leverage but maintain a balanced capital structure.
Debt to Assets (including Operating Lease Liability)
Merck & Co. Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Loans payable and current portion of long-term debt | 2,649) | 1,372) | 1,946) | 2,412) | 6,431) | |
| Long-term debt, excluding current portion | 34,462) | 33,683) | 28,745) | 30,690) | 25,360) | |
| Total debt | 37,111) | 35,055) | 30,691) | 33,102) | 31,791) | |
| Current operating lease liability (included in Accrued and other current liabilities) | 282) | 285) | 281) | 304) | 300) | |
| Noncurrent operating lease liability (included in Other noncurrent liabilities) | 877) | 928) | 1,013) | 1,225) | 1,362) | |
| Total debt (including operating lease liability) | 38,270) | 36,268) | 31,985) | 34,631) | 33,453) | |
| Total assets | 117,106) | 106,675) | 109,160) | 105,694) | 91,588) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.33 | 0.34 | 0.29 | 0.33 | 0.37 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 0.50 | 0.45 | 0.46 | 0.53 | 0.58 | |
| Amgen Inc. | 0.66 | 0.67 | 0.61 | 0.56 | 0.53 | |
| Bristol-Myers Squibb Co. | 0.55 | 0.44 | 0.42 | 0.42 | 0.44 | |
| Danaher Corp. | 0.22 | 0.23 | 0.25 | 0.28 | 0.29 | |
| Eli Lilly & Co. | 0.44 | 0.41 | 0.34 | 0.36 | 0.37 | |
| Gilead Sciences Inc. | 0.46 | 0.41 | 0.41 | 0.40 | 0.47 | |
| Johnson & Johnson | 0.21 | 0.18 | 0.22 | 0.19 | 0.21 | |
| Pfizer Inc. | 0.31 | 0.33 | 0.20 | 0.23 | 0.27 | |
| Regeneron Pharmaceuticals Inc. | 0.08 | 0.08 | 0.09 | 0.11 | 0.16 | |
| Thermo Fisher Scientific Inc. | 0.34 | 0.37 | 0.37 | 0.38 | 0.33 | |
| Vertex Pharmaceuticals Inc. | 0.08 | 0.04 | 0.05 | 0.07 | 0.08 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.37 | 0.35 | 0.32 | 0.34 | 0.37 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.33 | 0.32 | 0.30 | 0.31 | 0.34 | |
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
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 38,270 ÷ 117,106 = 0.33
2 Click competitor name to see calculations.
The financial data over the five-year period reveals notable dynamics in the company's debt levels, asset base, and leverage ratios.
- Total Debt (including operating lease liability)
- The total debt showed a fluctuating trend, starting at 33,453 million US dollars in 2020 and increasing slightly to 34,631 million in 2021. It then decreased to 31,985 million in 2022, marking the lowest point in the period. However, debt levels increased again in 2023 and 2024, reaching 36,268 million and 38,270 million US dollars respectively. This indicates some variability in debt management, with a recent upward trajectory in leverage.
- Total Assets
- Total assets consistently increased from 91,588 million US dollars in 2020 to 117,106 million in 2024. Although there was a slight decline between 2022 and 2023, assets rebounded strongly in the final year. This upward trend suggests ongoing growth or investment in asset acquisition over the period.
- Debt to Assets Ratio (including operating lease liability)
- The leverage ratio decreased from 0.37 in 2020 to 0.29 in 2022, reflecting an improvement in the company’s balance sheet leverage, possibly due to asset growth outpacing debt reduction in that period. However, the ratio increased again to 0.34 in 2023 before slightly declining to 0.33 in 2024. Despite these fluctuations, the ratio remains below the initial 2020 level, indicating a generally moderate leverage position relative to assets.
Overall, the data indicates that while the company has grown its asset base significantly, debt levels have similarly increased in recent years after a temporary reduction, resulting in a somewhat stable but moderately fluctuating debt-to-assets ratio. This pattern suggests careful balancing of borrowing with asset growth, with recent increases in debt possibly funding expansion or operational needs.
Financial Leverage
Merck & Co. Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 117,106) | 106,675) | 109,160) | 105,694) | 91,588) | |
| Total Merck & Co., Inc. stockholders’ equity | 46,313) | 37,581) | 45,991) | 38,184) | 25,317) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.53 | 2.84 | 2.37 | 2.77 | 3.62 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| AbbVie Inc. | 40.65 | 13.00 | 8.04 | 9.51 | 11.51 | |
| Amgen Inc. | 15.63 | 15.59 | 17.79 | 9.13 | 6.69 | |
| Bristol-Myers Squibb Co. | 5.67 | 3.23 | 3.12 | 3.04 | 3.13 | |
| Danaher Corp. | 1.57 | 1.58 | 1.68 | 1.84 | 1.92 | |
| Eli Lilly & Co. | 5.55 | 5.94 | 4.65 | 5.44 | 8.27 | |
| Gilead Sciences Inc. | 3.05 | 2.72 | 2.97 | 3.23 | 3.76 | |
| Johnson & Johnson | 2.52 | 2.44 | 2.44 | 2.46 | 2.76 | |
| Pfizer Inc. | 2.42 | 2.54 | 2.06 | 2.35 | 2.44 | |
| Regeneron Pharmaceuticals Inc. | 1.29 | 1.27 | 1.29 | 1.36 | 1.56 | |
| Thermo Fisher Scientific Inc. | 1.96 | 2.11 | 2.21 | 2.33 | 2.00 | |
| Vertex Pharmaceuticals Inc. | 1.37 | 1.29 | 1.30 | 1.33 | 1.35 | |
| Financial Leverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 2.93 | 2.85 | 2.62 | 2.86 | 3.16 | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.81 | 2.76 | 2.63 | 2.74 | 2.93 | |
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
Financial leverage = Total assets ÷ Total Merck & Co., Inc. stockholders’ equity
= 117,106 ÷ 46,313 = 2.53
2 Click competitor name to see calculations.
- Total Assets
- The total assets show a general upward trend over the five-year period, increasing from 91,588 million USD in 2020 to 117,106 million USD in 2024. Notably, there was a significant jump between 2020 and 2021, followed by more moderate increases and a slight dip in 2023 before rising again in 2024.
- Total Stockholders' Equity
- Stockholders' equity has experienced considerable fluctuations during the period. It rose sharply from 25,317 million USD in 2020 to 38,184 million USD in 2021 and further to 45,991 million USD in 2022. However, there was a notable decline in 2023 to 37,581 million USD, followed by a recovery to 46,313 million USD in 2024.
- Financial Leverage
- The financial leverage ratio decreased steadily from 3.62 in 2020 to 2.37 in 2022, indicating a reduction in reliance on debt relative to equity during this period. However, the ratio rose again to 2.84 in 2023 before declining to 2.53 in 2024, showing some fluctuation but overall lower leverage compared to the beginning of the period.
Interest Coverage
Merck & Co. Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Merck & Co., Inc. | 17,117) | 365) | 14,519) | 13,049) | 7,067) | |
| Add: Net income attributable to noncontrolling interest | 16) | 12) | 7) | 13) | 15) | |
| Less: Income from discontinued operations, net of taxes | —) | —) | —) | 704) | —) | |
| Add: Income tax expense | 2,803) | 1,512) | 1,918) | 1,521) | 1,709) | |
| Add: Interest expense | 1,271) | 1,146) | 962) | 806) | 831) | |
| Earnings before interest and tax (EBIT) | 21,207) | 3,035) | 17,406) | 14,685) | 9,622) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 16.69 | 2.65 | 18.09 | 18.22 | 11.58 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| AbbVie Inc. | 2.32 | 3.81 | 7.04 | 6.36 | 2.38 | |
| Amgen Inc. | 2.46 | 3.73 | 6.22 | 6.60 | 7.44 | |
| Bristol-Myers Squibb Co. | -3.30 | 8.24 | 7.26 | 7.07 | -3.84 | |
| Danaher Corp. | 17.71 | 18.64 | 40.30 | 32.92 | 17.35 | |
| Eli Lilly & Co. | 17.24 | 14.49 | 21.53 | 19.12 | 21.11 | |
| Gilead Sciences Inc. | 1.71 | 8.27 | 7.22 | 9.27 | 2.70 | |
| Johnson & Johnson | 23.10 | 20.51 | 79.71 | 125.46 | 83.07 | |
| Pfizer Inc. | 3.60 | 1.48 | 29.05 | 19.83 | 6.17 | |
| Regeneron Pharmaceuticals Inc. | 87.59 | 58.52 | 82.80 | 163.75 | 67.97 | |
| Thermo Fisher Scientific Inc. | 6.03 | 5.54 | 11.56 | 17.49 | 14.07 | |
| Vertex Pharmaceuticals Inc. | 9.12 | 100.32 | 78.23 | 45.40 | 54.60 | |
| Interest Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 5.51 | 6.43 | 15.40 | 14.91 | 7.56 | |
| Interest Coverage, Industry | ||||||
| Health Care | 5.77 | 7.23 | 13.14 | 12.73 | 7.63 | |
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
Interest coverage = EBIT ÷ Interest expense
= 21,207 ÷ 1,271 = 16.69
2 Click competitor name to see calculations.
The financial data presents a variable trend in earnings before interest and tax (EBIT) over the reported periods. Starting from a value of US$9,622 million at the end of 2020, EBIT showed a consistent upward trajectory through 2021 and 2022, reaching US$17,406 million. However, a significant decline occurred in 2023, where EBIT dropped sharply to US$3,035 million. This was followed by a strong recovery in 2024, with EBIT increasing to its highest level over the period at US$21,207 million.
Interest expense demonstrated a gradual increase over the time frame. It rose from US$831 million in 2020 to US$1,271 million by the end of 2024, reflecting a steady but moderate growth in financing costs or debt-related charges.
The interest coverage ratio, which measures the ability to meet interest obligations from operating earnings, largely mirrored the fluctuations in EBIT. Initially, the ratio improved significantly from 11.58 in 2020 to a peak of 18.22 in 2021, maintaining a similar high level of 18.09 in 2022. In 2023, the ratio sharply deteriorated to 2.65, indicating potential challenges in covering interest expenses during that year. By 2024, the ratio rebounded strongly to 16.69, signaling restored financial strength in servicing interest obligations.
- EBIT Trends
- Rising steadily from 2020 through 2022, a sharp decrease in 2023, followed by the highest recorded value in 2024.
- Interest Expense Trends
- Gradual and consistent increase over the period, suggesting increasing borrowing costs or debt levels.
- Interest Coverage Ratio
- High and stable coverage from 2020 to 2022, a dramatic decline in 2023 indicating decreased ability to cover interest payments, then a recovery in 2024 underscoring regained operational earnings capacity.
Fixed Charge Coverage
Merck & Co. Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Merck & Co., Inc. | 17,117) | 365) | 14,519) | 13,049) | 7,067) | |
| Add: Net income attributable to noncontrolling interest | 16) | 12) | 7) | 13) | 15) | |
| Less: Income from discontinued operations, net of taxes | —) | —) | —) | 704) | —) | |
| Add: Income tax expense | 2,803) | 1,512) | 1,918) | 1,521) | 1,709) | |
| Add: Interest expense | 1,271) | 1,146) | 962) | 806) | 831) | |
| Earnings before interest and tax (EBIT) | 21,207) | 3,035) | 17,406) | 14,685) | 9,622) | |
| Add: Operating lease cost | 348) | 339) | 334) | 343) | 346) | |
| Earnings before fixed charges and tax | 21,555) | 3,374) | 17,740) | 15,028) | 9,968) | |
| Interest expense | 1,271) | 1,146) | 962) | 806) | 831) | |
| Operating lease cost | 348) | 339) | 334) | 343) | 346) | |
| Fixed charges | 1,619) | 1,485) | 1,296) | 1,149) | 1,177) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 13.31 | 2.27 | 13.69 | 13.08 | 8.47 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| AbbVie Inc. | 2.24 | 3.59 | 6.54 | 5.90 | 2.28 | |
| Amgen Inc. | 2.37 | 3.55 | 5.52 | 5.67 | 6.48 | |
| Bristol-Myers Squibb Co. | -2.75 | 6.69 | 6.30 | 6.01 | -3.08 | |
| Danaher Corp. | 9.05 | 9.55 | 13.41 | 10.85 | 7.10 | |
| Eli Lilly & Co. | 13.81 | 10.98 | 15.17 | 13.33 | 15.06 | |
| Gilead Sciences Inc. | 1.61 | 7.18 | 6.30 | 8.15 | 2.45 | |
| Johnson & Johnson | 18.47 | 16.50 | 38.72 | 48.16 | 33.93 | |
| Pfizer Inc. | 3.13 | 1.34 | 18.79 | 14.22 | 4.98 | |
| Regeneron Pharmaceuticals Inc. | 53.13 | 46.55 | 68.67 | 138.96 | 57.70 | |
| Thermo Fisher Scientific Inc. | 5.01 | 4.61 | 8.12 | 12.19 | 10.30 | |
| Vertex Pharmaceuticals Inc. | 2.85 | 48.66 | 47.97 | 29.62 | 39.35 | |
| Fixed Charge Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 4.80 | 5.40 | 11.85 | 11.49 | 6.11 | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 4.67 | 5.57 | 9.15 | 8.86 | 5.56 | |
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
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 21,555 ÷ 1,619 = 13.31
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations in earnings before fixed charges and tax, fixed charges, and fixed charge coverage over the five-year period.
- Earnings before fixed charges and tax
- This metric shows an overall upward trend with significant variation. It increased from 9,968 million US dollars in 2020 to 15,028 million US dollars in 2021 and further to 17,740 million US dollars in 2022. However, there was a sharp decline to 3,374 million US dollars in 2023, followed by a substantial rebound to 21,555 million US dollars in 2024. This pattern indicates strong growth with a temporary but pronounced dip in 2023.
- Fixed charges
- Fixed charges rose moderately and steadily throughout the period. Beginning at 1,177 million US dollars in 2020, they slightly decreased in 2021 to 1,149 million US dollars, then consistently increased to 1,296 million in 2022, 1,485 million in 2023, and 1,619 million in 2024. The gradual increase suggests growing fixed financial obligations.
- Fixed charge coverage
- The ratio of fixed charge coverage mirrors the volatility seen in earnings before fixed charges and tax. It was strong at 8.47 in 2020, increased to 13.08 in 2021 and 13.69 in 2022, dropped sharply to 2.27 in 2023, and recovered to 13.31 in 2024. This indicates that the company’s ability to cover fixed charges with earnings was robust except for a substantial decrease in 2023, reflecting the earnings decline in that year.