Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Turnover Ratios
Average No. Days
Merck & Co. Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 short-term operating activity ratios reveals a period of fluctuating operational efficiency, characterized by a significant expansion and subsequent contraction of the cash conversion cycle between March 2022 and September 2026.
- Inventory Management
- Inventory turnover exhibited a downward trend from a high of 3.10 in September 2022 to a low of 2.25 in June 2025. This decline corresponds with an increase in the average inventory processing period, which peaked at 162 days during the same period. However, a notable recovery occurred in the final quarters of the analysis, with turnover rising to 3.09 and the processing period decreasing to 118 days by September 2026, suggesting improved inventory throughput and optimized stock levels.
- Receivables and Collections
- Receivables turnover remained relatively stable throughout the period, generally fluctuating between 5.29 and 6.27. The average receivable collection period showed minimal volatility, maintaining a range between 58 and 69 days. This consistency indicates a disciplined and predictable credit collection process with few significant disruptions in customer payment behavior.
- Payables and Liquidity Strategy
- Payables turnover showed moderate volatility, reaching a minimum of 3.53 in September 2025. This correlate with an increase in the average payables payment period, which peaked at 103 days in June 2025. The extension of payment terms during mid-2025 appears to have served as a strategic offset to the lengthening inventory processing period, helping to mitigate the impact on overall liquidity.
- Operational Cycles and Cash Conversion
- The operating cycle experienced a prolonged expansion, rising from 177 days in September 2022 to a peak of 230 days in June 2025, primarily driven by slower inventory turnover. Consequently, the cash conversion cycle trended upward, peaking at 138 days in the first half of 2024. By September 2026, the cash conversion cycle contracted to 91 days, the lowest point in the analyzed period, reflecting a significant improvement in the speed at which cash is recovered from operational investments.
- Working Capital Efficiency
- Working capital turnover displayed the highest degree of volatility, with a significant peak of 9.68 in March 2024 followed by a sharp decline to 3.39 in September 2025. This variance suggests substantial shifts in the relationship between net working capital and sales volume, though the ratio recovered to 6.64 by the end of the period.
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Inventory Turnover
Merck & Co. Inc., inventory turnover calculation (quarterly data)
| Sep 30, 2026 | Jun 30, 2026 | 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) | |||||||||||||||||||||||||
| Cost of sales | 4,892) | 4,395) | 4,195) | 5,551) | 3,855) | 3,557) | 3,419) | 3,828) | 4,080) | 3,745) | 3,540) | 3,912) | 4,264) | 4,024) | 3,926) | 3,881) | 3,934) | 4,216) | 5,380) | ||||||
| Inventories, excludes inventories classified in Other assets | 6,164) | 6,207) | 6,479) | 6,658) | 6,444) | 6,601) | 6,196) | 6,109) | 6,244) | 6,469) | 6,510) | 6,358) | 6,131) | 5,930) | 5,863) | 5,911) | 5,614) | 5,535) | 5,774) | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Inventory turnover1 | 3.09 | 2.90 | 2.65 | 2.46 | 2.27 | 2.25 | 2.43 | 2.49 | 2.45 | 2.39 | 2.42 | 2.54 | 2.63 | 2.66 | 2.72 | 2.95 | 3.10 | 3.06 | 2.74 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | 3.27 | 3.58 | 3.65 | 3.68 | 3.65 | 3.42 | 3.71 | 4.04 | 4.09 | 4.86 | 4.83 | 4.98 | 4.74 | 4.30 | 4.53 | 4.87 | 5.54 | 4.99 | 4.96 | ||||||
| Amgen Inc. | 1.77 | 1.87 | 1.91 | 1.93 | 1.92 | 1.88 | 1.88 | 1.84 | 1.75 | 1.42 | 1.14 | 0.89 | 1.41 | 1.38 | 1.31 | 1.30 | 1.34 | 1.40 | 1.48 | ||||||
| Bristol-Myers Squibb Co. | 5.69 | 5.36 | 5.20 | 5.18 | 5.31 | 5.18 | 5.28 | 5.46 | 3.57 | 3.72 | 3.70 | 4.02 | 4.33 | 4.39 | 3.93 | 4.33 | 4.77 | 4.59 | 4.55 | ||||||
| Danaher Corp. | 3.38 | 3.20 | 3.90 | 4.04 | 3.67 | 3.60 | 3.79 | 4.15 | 3.60 | 3.59 | 3.73 | 3.80 | 3.53 | 3.58 | 3.50 | 4.03 | 3.80 | 3.71 | 3.87 | ||||||
| Eli Lilly & Co. | 0.78 | 0.79 | 0.85 | 0.80 | 0.83 | 0.84 | 0.96 | 1.11 | 1.05 | 1.16 | 1.17 | 1.23 | 1.40 | 1.37 | 1.36 | 1.54 | 1.86 | 1.79 | 1.93 | ||||||
| Gilead Sciences Inc. | 3.28 | 3.18 | 3.21 | 3.51 | 3.47 | 3.40 | 3.55 | 3.66 | 3.62 | 3.33 | 3.59 | 3.64 | 3.49 | 3.45 | 3.57 | 3.75 | 4.71 | 4.50 | 4.50 | ||||||
| Johnson & Johnson | 2.10 | 2.08 | 2.13 | 2.13 | 2.08 | 2.17 | 2.24 | 2.21 | 2.15 | 2.20 | 2.32 | 2.37 | 2.46 | 2.23 | 2.36 | 2.49 | 2.68 | 2.69 | 2.77 | ||||||
| Pfizer Inc. | 1.69 | 1.72 | 1.57 | 1.51 | 1.46 | 1.52 | 1.60 | 1.65 | 1.66 | 2.05 | 2.15 | 2.45 | 2.65 | 2.31 | 3.07 | 3.82 | 3.62 | 3.66 | 3.67 | ||||||
| Regeneron Pharmaceuticals Inc. | 0.83 | 0.76 | 0.74 | 0.66 | 0.64 | 0.64 | 0.63 | 0.64 | 0.64 | 0.65 | 0.66 | 0.70 | 0.72 | 0.69 | 0.67 | 0.65 | 0.83 | 0.96 | 1.27 | ||||||
| Thermo Fisher Scientific Inc. | 4.94 | 4.87 | 4.87 | 4.85 | 4.47 | 4.57 | 4.82 | 5.06 | 4.62 | 4.83 | 4.93 | 5.06 | 4.83 | 4.64 | 4.62 | 4.60 | 4.29 | 4.03 | 3.87 | ||||||
| Vertex Pharmaceuticals Inc. | 0.83 | 1.00 | 0.95 | 0.98 | 0.99 | 1.06 | 1.14 | 1.27 | 1.37 | 1.53 | 1.65 | 1.71 | 1.71 | 1.90 | 2.06 | 2.35 | 2.69 | 2.70 | 2.83 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Inventory turnover
= (Cost of salesQ3 2026
+ Cost of salesQ2 2026
+ Cost of salesQ1 2026
+ Cost of salesQ4 2025)
÷ Inventories, excludes inventories classified in Other assets
= (4,892 + 4,395 + 4,195 + 5,551)
÷ 6,164 = 3.09
2 Click competitor name to see calculations.
The inventory turnover performance exhibits a cyclical pattern over the analyzed period, characterized by an initial peak, a prolonged decline in efficiency, and a subsequent recovery in the final quarters.
- Inventory Turnover Trends
- The turnover ratio peaked at 3.10 in September 2022 before entering a sustained downward trajectory that lasted until June 2025, where it reached a period low of 2.25. This decline indicates a reduction in the velocity of inventory movement, suggesting that assets were held for longer durations relative to the cost of sales.
- Analysis of Inventory Accumulation
- The degradation in the turnover ratio between 2022 and 2025 correlates with a general increase in inventory levels. Inventories rose from 5.61 billion USD in September 2022 to a peak of 6.66 billion USD in December 2025. Because the Cost of Sales remained relatively stable or experienced moderate fluctuations during this phase, the growth in inventory holdings directly pressured the turnover ratio downward.
- Operational Recovery and Efficiency Gains
- A significant reversal in the trend is observed starting in the second half of 2025. The turnover ratio climbed from 2.25 in June 2025 to 3.09 by September 2026. This recovery was driven by two primary factors: a substantial spike in the Cost of Sales, which peaked at 5.55 billion USD in December 2025, and a concerted reduction in inventory levels, which decreased to 6.16 billion USD by September 2026.
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Receivables Turnover
Merck & Co. Inc., receivables turnover calculation (quarterly data)
| Sep 30, 2026 | Jun 30, 2026 | 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) | |||||||||||||||||||||||||
| Sales | 18,085) | 16,607) | 16,286) | 16,400) | 17,276) | 15,806) | 15,529) | 15,624) | 16,657) | 16,112) | 15,775) | 14,631) | 15,962) | 15,035) | 14,487) | 13,830) | 14,959) | 14,593) | 15,901) | ||||||
| Accounts receivable, net of allowance for doubtful accounts | 12,744) | 12,564) | 12,210) | 11,775) | 12,120) | 11,846) | 10,790) | 10,278) | 11,381) | 11,642) | 11,366) | 10,349) | 10,394) | 11,030) | 10,415) | 9,450) | 9,482) | 9,643) | 9,828) | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Receivables turnover1 | 5.29 | 5.30 | 5.39 | 5.52 | 5.30 | 5.37 | 5.92 | 6.24 | 5.55 | 5.37 | 5.40 | 5.81 | 5.71 | 5.29 | 5.56 | 6.27 | 6.22 | 5.93 | 5.49 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | 4.89 | 4.66 | 5.03 | 4.86 | 4.67 | 4.62 | 4.60 | 5.16 | 4.84 | 4.69 | 4.55 | 4.87 | 4.83 | 4.88 | 4.95 | 5.16 | 5.38 | 5.10 | 5.29 | ||||||
| Amgen Inc. | 3.57 | 3.55 | 3.88 | 3.67 | 4.06 | 3.85 | 4.03 | 4.72 | 4.26 | 4.26 | 4.16 | 3.70 | 4.17 | 4.34 | 4.34 | 4.46 | 4.60 | 4.62 | 4.81 | ||||||
| Danaher Corp. | 6.21 | 6.33 | 6.49 | 6.28 | 6.46 | 6.74 | 6.79 | 6.75 | 6.77 | 7.15 | 7.02 | 6.09 | 6.15 | 6.64 | 6.89 | 6.40 | 7.09 | 6.81 | 6.87 | ||||||
| Eli Lilly & Co. | 3.91 | 3.97 | 3.92 | 3.67 | 3.69 | 3.76 | 4.07 | 4.09 | 3.97 | 3.53 | 4.56 | 3.75 | 3.93 | 3.93 | 3.68 | 4.14 | 4.35 | 4.57 | 4.64 | ||||||
| Gilead Sciences Inc. | 6.14 | 5.90 | 6.17 | 5.89 | 5.60 | 6.01 | 6.51 | 6.47 | 6.14 | 5.92 | 5.84 | 5.78 | 5.68 | 6.43 | 6.43 | 5.65 | 6.16 | 6.60 | 7.18 | ||||||
| Johnson & Johnson | 5.23 | 5.14 | 5.44 | 5.48 | 5.23 | 5.08 | 5.58 | 5.98 | 5.42 | 5.48 | 5.73 | 5.73 | 5.91 | 5.36 | 5.65 | 5.88 | 6.04 | 5.92 | 6.08 | ||||||
| Pfizer Inc. | 4.48 | 5.10 | 5.03 | 5.27 | 4.40 | 5.29 | 5.27 | 5.55 | 4.18 | 4.93 | 5.09 | 5.33 | 6.25 | 7.66 | 7.57 | 9.16 | 6.21 | 6.68 | 6.99 | ||||||
| Regeneron Pharmaceuticals Inc. | 2.23 | 2.37 | 2.60 | 2.50 | 2.51 | 2.53 | 2.53 | 2.29 | 2.27 | 2.36 | 2.51 | 2.31 | 2.35 | 2.47 | 2.42 | 2.28 | 2.47 | 2.76 | 3.41 | ||||||
| Thermo Fisher Scientific Inc. | 4.92 | 4.90 | 4.91 | 5.01 | 4.91 | 5.03 | 5.07 | 5.23 | 5.13 | 5.33 | 5.36 | 5.21 | 5.19 | 5.43 | 5.53 | 5.53 | 5.76 | 5.53 | 5.21 | ||||||
| Vertex Pharmaceuticals Inc. | 5.60 | 5.90 | 6.12 | 5.85 | 6.02 | 6.03 | 6.15 | 6.85 | 6.07 | 6.24 | 5.68 | 6.31 | 6.27 | 6.11 | 5.95 | 6.19 | 6.28 | 6.26 | 6.15 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Receivables turnover
= (SalesQ3 2026
+ SalesQ2 2026
+ SalesQ1 2026
+ SalesQ4 2025)
÷ Accounts receivable, net of allowance for doubtful accounts
= (18,085 + 16,607 + 16,286 + 16,400)
÷ 12,744 = 5.29
2 Click competitor name to see calculations.
The financial data reveals a general trajectory of revenue growth accompanied by a corresponding increase in net accounts receivable over the analyzed period. While sales volumes expanded from 15,901 million USD in March 2022 to a peak of 18,085 million USD by September 2026, the efficiency of receivables collection experienced periodic volatility and a long-term softening.
- Revenue and Asset Correlation
- A positive correlation is observed between sales growth and the balance of accounts receivable. Net receivables increased from 9,828 million USD in March 2022 to 12,744 million USD by September 2026. This growth in the receivables balance suggests that the increase in sales was partially supported by extended credit terms or a slower collection cycle as the company scaled its operations.
- Receivables Turnover Trends
- The receivables turnover ratio demonstrated three distinct phases. An initial period of improvement occurred throughout 2022, where the ratio rose from 5.49 to a peak of 6.27 by December 31, 2022. This was followed by a period of volatility between 2023 and 2024, characterized by fluctuations between a low of 5.29 and a high of 6.24. The final phase, spanning 2025 and 2026, indicates a gradual decline and stabilization, ending at 5.29 in September 2026.
- Operational Efficiency Analysis
- The decline in the turnover ratio from its 2022 peak suggests a reduction in the velocity of cash conversion from credit sales. Despite significant revenue growth in the final quarters of 2026, the turnover ratio remained stagnant or slightly decreased, indicating that the growth in accounts receivable slightly outpaced the growth in sales. This pattern suggests a potential shift in credit policy or changes in the payment behavior of the customer base over the long term.
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Payables Turnover
Merck & Co. Inc., payables turnover calculation (quarterly data)
| Sep 30, 2026 | Jun 30, 2026 | 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) | |||||||||||||||||||||||||
| Cost of sales | 4,892) | 4,395) | 4,195) | 5,551) | 3,855) | 3,557) | 3,419) | 3,828) | 4,080) | 3,745) | 3,540) | 3,912) | 4,264) | 4,024) | 3,926) | 3,881) | 3,934) | 4,216) | 5,380) | ||||||
| Trade accounts payable | 5,031) | 3,827) | 3,863) | 4,404) | 4,147) | 3,892) | 3,784) | 4,079) | 3,586) | 3,519) | 3,514) | 3,922) | 3,509) | 3,442) | 3,680) | 4,264) | 3,371) | 3,482) | 3,715) | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Payables turnover1 | 3.78 | 4.70 | 4.44 | 3.72 | 3.53 | 3.82 | 3.98 | 3.72 | 4.26 | 4.39 | 4.48 | 4.11 | 4.59 | 4.58 | 4.34 | 4.08 | 5.16 | 4.86 | 4.25 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Payables Turnover, Competitors2 | |||||||||||||||||||||||||
| Amgen Inc. | 3.84 | 4.05 | 4.02 | 5.09 | 4.29 | 4.12 | 5.25 | 6.74 | 5.99 | 5.01 | 6.10 | 5.32 | 5.22 | 5.67 | 4.97 | 4.08 | 5.30 | 5.09 | 4.65 | ||||||
| Bristol-Myers Squibb Co. | 3.33 | 3.53 | 3.38 | 3.90 | 3.42 | 2.61 | 3.52 | 3.88 | 3.43 | 3.05 | 3.12 | 3.28 | 3.75 | 3.38 | 3.20 | 3.33 | 3.82 | 3.41 | 3.25 | ||||||
| Danaher Corp. | 6.09 | 5.72 | 5.68 | 5.45 | 5.78 | 5.62 | 5.57 | 5.52 | 6.04 | 5.84 | 5.88 | 5.58 | 5.63 | 5.82 | 5.68 | 5.45 | 5.61 | 5.00 | 5.04 | ||||||
| Eli Lilly & Co. | 2.44 | 2.16 | 2.47 | 2.05 | 2.37 | 2.27 | 2.61 | 2.61 | 2.70 | 2.56 | 2.88 | 2.73 | 2.81 | 2.65 | 3.07 | 3.43 | 4.24 | 4.21 | 5.24 | ||||||
| Gilead Sciences Inc. | 6.66 | 9.22 | 9.52 | 8.72 | 7.66 | 10.65 | 8.47 | 7.50 | 7.49 | 12.57 | 10.69 | 11.81 | 9.90 | 9.06 | 8.99 | 6.25 | 11.22 | 11.89 | 11.43 | ||||||
| Johnson & Johnson | 3.46 | 3.41 | 2.96 | 2.52 | 3.06 | 3.07 | 2.97 | 2.66 | 3.03 | 3.03 | 3.23 | 2.76 | 3.29 | 2.75 | 3.05 | 2.66 | 3.08 | 3.15 | 3.26 | ||||||
| Pfizer Inc. | 4.16 | 3.73 | 3.72 | 3.07 | 3.32 | 3.44 | 3.30 | 3.17 | 3.67 | 4.60 | 4.19 | 3.72 | 5.07 | 3.92 | 4.78 | 5.04 | 5.49 | 6.17 | 6.66 | ||||||
| Regeneron Pharmaceuticals Inc. | 2.11 | 2.03 | 2.24 | 2.24 | 2.30 | 2.83 | 2.84 | 2.50 | 3.87 | 3.32 | 2.67 | 2.99 | 3.43 | 3.14 | 2.69 | 2.65 | 3.74 | 4.00 | 5.39 | ||||||
| Thermo Fisher Scientific Inc. | 9.04 | 8.39 | 8.00 | 7.27 | 8.23 | 8.53 | 8.25 | 8.18 | 9.63 | 9.85 | 9.91 | 8.97 | 10.41 | 10.82 | 9.35 | 7.67 | 9.93 | 8.84 | 7.96 | ||||||
| Vertex Pharmaceuticals Inc. | 3.97 | 4.10 | 3.44 | 3.58 | 3.83 | 3.59 | 3.49 | 3.71 | 3.73 | 4.27 | 3.81 | 3.46 | 3.13 | 3.16 | 3.41 | 3.55 | 8.23 | 5.01 | 5.52 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Payables turnover
= (Cost of salesQ3 2026
+ Cost of salesQ2 2026
+ Cost of salesQ1 2026
+ Cost of salesQ4 2025)
÷ Trade accounts payable
= (4,892 + 4,395 + 4,195 + 5,551)
÷ 5,031 = 3.78
2 Click competitor name to see calculations.
The analysis of the payables turnover ratio reveals a general downward trajectory over the evaluated period, indicating a systemic extension in the time taken to settle obligations with suppliers. While the ratio experienced periods of stability and brief recoveries, the overall trend points toward a strategic shift in working capital management, characterized by a slower turnover of trade accounts payable relative to the cost of sales.
- Performance Trends 2022-2023
- During the first two years of the period, the payables turnover ratio remained relatively elevated, peaking at 5.16 in September 2022. The ratio generally fluctuated between 4.08 and 4.59, suggesting a consistent and efficient cycle of supplier payments. The volatility observed during these quarters aligns with fluctuations in the cost of sales, which ranged from 3.88 billion to 5.38 billion US dollars.
- Performance Trends 2024-2025
- A discernible decline in turnover efficiency began in 2024, with the ratio dropping from 4.48 in March to a low of 3.72 by December 2024. This downward trend continued into 2025, reaching a period minimum of 3.53 in September 2025. This decline indicates that trade accounts payable began to grow at a faster rate than the associated cost of sales, effectively extending the payment cycle and increasing the company's reliance on supplier financing.
- Performance Trends 2026
- The first half of 2026 showed a temporary recovery, with the ratio climbing to 4.70 by June. However, this was followed by a sharp contraction to 3.78 by September 2026. This final decrease is particularly notable as it coincides with a significant increase in trade accounts payable, which reached a peak of 5.031 billion US dollars in the same quarter.
- Correlation Between Costs and Payables
- The relationship between cost of sales and trade accounts payable demonstrates a shift in liquidity management. While costs of sales remained relatively stable between 3.4 billion and 4.3 billion US dollars for much of the period, the abrupt spike in cost of sales to 5.551 billion US dollars in December 2025 was mirrored by a rise in payables to 4.404 billion US dollars. The most significant divergence occurred in September 2026, where the substantial increase in accounts payable outweighed the rise in cost of sales, resulting in the observed compression of the turnover ratio.
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Working Capital Turnover
Merck & Co. Inc., working capital turnover calculation (quarterly data)
| Sep 30, 2026 | Jun 30, 2026 | 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 | 38,941) | 36,679) | 35,015) | 43,516) | 47,557) | 37,065) | 35,503) | 38,782) | 40,361) | 38,205) | 31,445) | 32,168) | 31,954) | 29,977) | 33,402) | 35,722) | 33,561) | 32,116) | 31,184) | ||||||
| Less: Current liabilities | 28,801) | 27,731) | 26,945) | 28,327) | 28,628) | 26,037) | 25,174) | 28,420) | 29,586) | 26,060) | 25,099) | 25,694) | 23,094) | 23,394) | 23,131) | 24,239) | 22,998) | 23,168) | 22,316) | ||||||
| Working capital | 10,140) | 8,948) | 8,070) | 15,189) | 18,929) | 11,028) | 10,329) | 10,362) | 10,775) | 12,145) | 6,346) | 6,474) | 8,860) | 6,583) | 10,271) | 11,483) | 10,563) | 8,948) | 8,868) | ||||||
| Sales | 18,085) | 16,607) | 16,286) | 16,400) | 17,276) | 15,806) | 15,529) | 15,624) | 16,657) | 16,112) | 15,775) | 14,631) | 15,962) | 15,035) | 14,487) | 13,830) | 14,959) | 14,593) | 15,901) | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Working capital turnover1 | 6.64 | 7.44 | 8.15 | 4.28 | 3.39 | 5.77 | 6.19 | 6.19 | 5.86 | 5.14 | 9.68 | 9.29 | 6.69 | 8.86 | 5.63 | 5.16 | 5.58 | 6.39 | 6.09 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Amgen Inc. | 3.32 | 3.83 | 5.44 | 9.85 | 5.66 | 5.35 | 8.36 | 5.40 | 4.83 | 5.19 | 3.39 | 2.25 | 0.81 | 0.84 | 0.82 | 3.82 | 2.52 | 3.67 | 4.34 | ||||||
| Bristol-Myers Squibb Co. | 4.40 | 4.81 | 5.84 | 7.83 | 6.20 | 8.09 | 6.87 | 7.79 | 8.49 | 12.50 | 15.56 | 4.60 | 10.47 | 5.53 | 5.55 | 8.30 | 5.75 | 4.92 | 6.24 | ||||||
| Danaher Corp. | 4.46 | 4.76 | 3.83 | 4.13 | 7.39 | 5.71 | 8.27 | 8.85 | 8.73 | 8.10 | 3.60 | 4.22 | 2.18 | 3.08 | 3.81 | 4.20 | 5.00 | 5.43 | 5.91 | ||||||
| Eli Lilly & Co. | 4.73 | 4.71 | 3.97 | 3.19 | 2.71 | 4.92 | 4.38 | 10.32 | 6.06 | 12.62 | 5.45 | — | 31.79 | 12.21 | 5.77 | 31.84 | 14.71 | 19.45 | 8.19 | ||||||
| Gilead Sciences Inc. | 6.76 | 10.20 | 3.19 | 4.43 | 5.12 | 8.14 | 6.27 | 3.99 | 9.22 | 17.98 | 26.58 | 5.61 | 6.74 | 84.15 | 9.14 | 8.42 | 8.56 | 6.87 | 6.68 | ||||||
| Johnson & Johnson | 111.11 | 20.07 | 66.14 | 62.88 | 24.63 | 284.99 | 6.10 | 15.94 | 58.86 | 22.29 | 10.35 | 11.81 | 9.37 | 14.06 | 23.02 | — | 4.88 | 5.02 | 5.57 | ||||||
| Pfizer Inc. | 4.79 | 7.31 | 7.47 | 10.58 | 6.08 | 10.68 | 6.64 | 8.64 | 5,036.00 | — | 29.17 | — | 1.62 | 2.03 | 6.89 | 11.00 | 3.83 | 5.05 | 6.10 | ||||||
| Regeneron Pharmaceuticals Inc. | 1.16 | 1.20 | 1.14 | 1.05 | 1.05 | 1.08 | 1.01 | 0.97 | 0.88 | 0.87 | 0.86 | 0.82 | 0.87 | 0.92 | 0.90 | 0.96 | 1.09 | 1.14 | 1.46 | ||||||
| Thermo Fisher Scientific Inc. | 4.14 | 5.59 | 5.87 | 3.30 | 5.90 | 3.64 | 4.20 | 4.87 | 4.61 | 3.96 | 4.38 | 4.05 | 4.86 | 7.40 | 10.13 | 5.46 | 5.40 | 6.03 | 6.13 | ||||||
| Vertex Pharmaceuticals Inc. | 1.94 | 1.46 | 1.56 | 1.64 | 1.92 | 1.82 | 1.78 | 1.83 | 1.82 | 1.92 | 1.07 | 0.93 | 0.87 | 0.90 | 0.93 | 0.85 | 0.90 | 0.93 | 0.97 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Working capital turnover
= (SalesQ3 2026
+ SalesQ2 2026
+ SalesQ1 2026
+ SalesQ4 2025)
÷ Working capital
= (18,085 + 16,607 + 16,286 + 16,400)
÷ 10,140 = 6.64
2 Click competitor name to see calculations.
The working capital turnover ratio exhibits significant volatility over the analyzed period, driven primarily by substantial fluctuations in the working capital base rather than changes in sales volume. While sales demonstrate a consistent, gradual upward trajectory, the efficiency of working capital utilization has undergone distinct cycles of expansion and contraction.
- Efficiency Peaks (2023 – Early 2024)
- A period of heightened efficiency is observed between June 2023 and March 2024, where the turnover ratio surged from 8.86 to a peak of 9.68. This trend is directly correlated with a significant reduction in working capital, which reached lows of approximately 6.3 billion to 6.6 billion US dollars. During this phase, the organization generated high sales volumes relative to a lean short-term asset base, indicating an aggressive optimization of operating liquidity.
- Liquidity Expansion and Ratio Contraction (2024 – 2025)
- A sharp reversal in turnover efficiency occurred starting in June 2024, with the ratio declining to a period low of 3.39 by September 2025. This decline coincides with a substantial increase in working capital, which peaked at 18.9 billion US dollars. The inverse relationship between the rising working capital and the falling turnover ratio suggests a period of heavy investment in current assets or an accumulation of inventory and receivables that outpaced sales growth.
- Stabilization and Recovery (2026)
- Beginning in early 2026, a recovery trend is evident as the turnover ratio climbed back to 8.15 in March and settled at 6.64 by September. This recovery was facilitated by a reduction in working capital back toward the 8 billion to 10 billion US dollar range, occurring simultaneously with sales reaching their highest observed level of 18.1 billion US dollars. This indicates a return to a more balanced operating cycle.
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Average Inventory Processing Period
Merck & Co. Inc., average inventory processing period calculation (quarterly data)
| Sep 30, 2026 | Jun 30, 2026 | 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 | |||||||||||||||||||||||||
| Inventory turnover | 3.09 | 2.90 | 2.65 | 2.46 | 2.27 | 2.25 | 2.43 | 2.49 | 2.45 | 2.39 | 2.42 | 2.54 | 2.63 | 2.66 | 2.72 | 2.95 | 3.10 | 3.06 | 2.74 | ||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average inventory processing period1 | 118 | 126 | 138 | 148 | 160 | 162 | 150 | 147 | 149 | 153 | 151 | 144 | 139 | 137 | 134 | 124 | 118 | 119 | 133 | ||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | 112 | 102 | 100 | 99 | 100 | 107 | 98 | 90 | 89 | 75 | 75 | 73 | 77 | 85 | 81 | 75 | 66 | 73 | 74 | ||||||
| Amgen Inc. | 206 | 195 | 191 | 189 | 190 | 194 | 195 | 199 | 209 | 257 | 321 | 411 | 259 | 265 | 279 | 281 | 272 | 260 | 247 | ||||||
| Bristol-Myers Squibb Co. | 64 | 68 | 70 | 70 | 69 | 70 | 69 | 67 | 102 | 98 | 99 | 91 | 84 | 83 | 93 | 84 | 76 | 79 | 80 | ||||||
| Danaher Corp. | 108 | 114 | 94 | 90 | 99 | 101 | 96 | 88 | 101 | 102 | 98 | 96 | 104 | 102 | 104 | 91 | 96 | 98 | 94 | ||||||
| Eli Lilly & Co. | 469 | 463 | 428 | 454 | 441 | 435 | 379 | 329 | 349 | 316 | 312 | 298 | 261 | 267 | 268 | 237 | 196 | 204 | 189 | ||||||
| Gilead Sciences Inc. | 111 | 115 | 114 | 104 | 105 | 108 | 103 | 100 | 101 | 110 | 102 | 100 | 105 | 106 | 102 | 97 | 78 | 81 | 81 | ||||||
| Johnson & Johnson | 174 | 176 | 172 | 171 | 176 | 168 | 163 | 165 | 169 | 166 | 158 | 154 | 149 | 164 | 155 | 147 | 136 | 136 | 132 | ||||||
| Pfizer Inc. | 216 | 212 | 232 | 242 | 251 | 239 | 229 | 222 | 219 | 178 | 170 | 149 | 138 | 158 | 119 | 95 | 101 | 100 | 99 | ||||||
| Regeneron Pharmaceuticals Inc. | 439 | 479 | 491 | 556 | 571 | 570 | 582 | 572 | 573 | 562 | 553 | 519 | 508 | 532 | 549 | 562 | 440 | 379 | 287 | ||||||
| Thermo Fisher Scientific Inc. | 74 | 75 | 75 | 75 | 82 | 80 | 76 | 72 | 79 | 76 | 74 | 72 | 76 | 79 | 79 | 79 | 85 | 91 | 94 | ||||||
| Vertex Pharmaceuticals Inc. | 437 | 365 | 384 | 373 | 369 | 345 | 320 | 287 | 267 | 238 | 222 | 214 | 213 | 192 | 177 | 156 | 136 | 135 | 129 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.09 = 118
2 Click competitor name to see calculations.
The analysis of short-term operating activity reveals a cyclical pattern in inventory management, characterized by an initial phase of efficiency, a prolonged period of decelerating turnover, and a subsequent recovery to optimal levels.
- Inventory Turnover Trends
- A fluctuating trend is observed in the inventory turnover ratio. Following a peak of 3.10 in September 2022, the ratio entered a consistent downward trajectory, reaching a minimum of 2.25 by June 2025. This decline indicates a reduction in the frequency with which inventory was replaced during this period. However, a strong recovery trend began in the second half of 2025, with the ratio ascending to 3.09 by September 2026, effectively returning to the efficiency levels seen in 2022.
- Average Inventory Processing Period
- The average inventory processing period exhibits an inverse correlation with the turnover ratio. The processing time reached its lowest point of 118 days in September 2022. Subsequently, a gradual increase in the number of days required to process inventory occurred, peaking at 162 days in June 2025. This represents a significant expansion of the operating cycle. From July 2025 onward, a steady contraction is evident, with the processing period decreasing to 118 days by September 2026.
- Operational Efficiency Insights
- The data indicates a period of operational inefficiency between late 2022 and mid-2025, where the extended processing period suggests either an accumulation of excess stock or a slowdown in sales velocity. The subsequent reversal of this trend, culminating in September 2026, points to successful inventory optimization strategies or increased demand, resulting in a streamlined supply chain and improved liquidity tied to inventory.
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Average Receivable Collection Period
Merck & Co. Inc., average receivable collection period calculation (quarterly data)
| Sep 30, 2026 | Jun 30, 2026 | 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 | |||||||||||||||||||||||||
| Receivables turnover | 5.29 | 5.30 | 5.39 | 5.52 | 5.30 | 5.37 | 5.92 | 6.24 | 5.55 | 5.37 | 5.40 | 5.81 | 5.71 | 5.29 | 5.56 | 6.27 | 6.22 | 5.93 | 5.49 | ||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average receivable collection period1 | 69 | 69 | 68 | 66 | 69 | 68 | 62 | 58 | 66 | 68 | 68 | 63 | 64 | 69 | 66 | 58 | 59 | 62 | 66 | ||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | 75 | 78 | 73 | 75 | 78 | 79 | 79 | 71 | 75 | 78 | 80 | 75 | 76 | 75 | 74 | 71 | 68 | 72 | 69 | ||||||
| Amgen Inc. | 102 | 103 | 94 | 99 | 90 | 95 | 91 | 77 | 86 | 86 | 88 | 99 | 88 | 84 | 84 | 82 | 79 | 79 | 76 | ||||||
| Danaher Corp. | 59 | 58 | 56 | 58 | 56 | 54 | 54 | 54 | 54 | 51 | 52 | 60 | 59 | 55 | 53 | 57 | 51 | 54 | 53 | ||||||
| Eli Lilly & Co. | 93 | 92 | 93 | 99 | 99 | 97 | 90 | 89 | 92 | 103 | 80 | 97 | 93 | 93 | 99 | 88 | 84 | 80 | 79 | ||||||
| Gilead Sciences Inc. | 59 | 62 | 59 | 62 | 65 | 61 | 56 | 56 | 59 | 62 | 62 | 63 | 64 | 57 | 57 | 65 | 59 | 55 | 51 | ||||||
| Johnson & Johnson | 70 | 71 | 67 | 67 | 70 | 72 | 65 | 61 | 67 | 67 | 64 | 64 | 62 | 68 | 65 | 62 | 60 | 62 | 60 | ||||||
| Pfizer Inc. | 81 | 72 | 73 | 69 | 83 | 69 | 69 | 66 | 87 | 74 | 72 | 69 | 58 | 48 | 48 | 40 | 59 | 55 | 52 | ||||||
| Regeneron Pharmaceuticals Inc. | 164 | 154 | 140 | 146 | 146 | 144 | 144 | 160 | 161 | 155 | 146 | 158 | 156 | 148 | 151 | 160 | 148 | 132 | 107 | ||||||
| Thermo Fisher Scientific Inc. | 74 | 74 | 74 | 73 | 74 | 73 | 72 | 70 | 71 | 68 | 68 | 70 | 70 | 67 | 66 | 66 | 63 | 66 | 70 | ||||||
| Vertex Pharmaceuticals Inc. | 65 | 62 | 60 | 62 | 61 | 61 | 59 | 53 | 60 | 58 | 64 | 58 | 58 | 60 | 61 | 59 | 58 | 58 | 59 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.29 = 69
2 Click competitor name to see calculations.
The analysis of short-term operating activity reveals a consistent cyclical pattern in the management of accounts receivable from March 2022 through September 2026. The efficiency of the collection process exhibits periodic fluctuations, although it remains within a defined operational range.
- Receivables Turnover
- The turnover ratio demonstrates a fluctuating trend with notable peaks occurring in the fourth quarter of 2022 (6.27) and the fourth quarter of 2024 (6.24). A period of relative decline was observed throughout 2023, reaching a low of 5.29 in June 2023. From 2025 through September 2026, the ratio shows a gradual downward trajectory, stabilizing between 5.29 and 5.39, which suggests a decrease in the frequency with which receivables are converted into cash.
- Average Receivable Collection Period
- The collection period exhibits an inverse correlation with the turnover ratio, oscillating between a minimum of 58 days and a maximum of 69 days. Optimal collection efficiency was achieved in December 2022 and December 2024, both recording a 58-day period. However, a lengthening of the collection cycle is evident in the later periods, with the duration remaining stagnant at 69 days from June 2026 through September 2026.
Overall, the results indicate a slight deterioration in receivable collection efficiency toward the end of the observed period. While the organization historically managed to compress the collection window to under 60 days during year-end cycles, the most recent quarters show a sustained increase in the number of days required to collect outstanding balances, suggesting a shift in credit terms or slower payment behavior from customers.
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Operating Cycle
Merck & Co. Inc., operating cycle calculation (quarterly data)
No. days
| Sep 30, 2026 | Jun 30, 2026 | 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 | |||||||||||||||||||||||||
| Average inventory processing period | 118 | 126 | 138 | 148 | 160 | 162 | 150 | 147 | 149 | 153 | 151 | 144 | 139 | 137 | 134 | 124 | 118 | 119 | 133 | ||||||
| Average receivable collection period | 69 | 69 | 68 | 66 | 69 | 68 | 62 | 58 | 66 | 68 | 68 | 63 | 64 | 69 | 66 | 58 | 59 | 62 | 66 | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Operating cycle1 | 187 | 195 | 206 | 214 | 229 | 230 | 212 | 205 | 215 | 221 | 219 | 207 | 203 | 206 | 200 | 182 | 177 | 181 | 199 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Operating Cycle, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | 187 | 180 | 173 | 174 | 178 | 186 | 177 | 161 | 164 | 153 | 155 | 148 | 153 | 160 | 155 | 146 | 134 | 145 | 143 | ||||||
| Amgen Inc. | 308 | 298 | 285 | 288 | 280 | 289 | 286 | 276 | 295 | 343 | 409 | 510 | 347 | 349 | 363 | 363 | 351 | 339 | 323 | ||||||
| Danaher Corp. | 167 | 172 | 150 | 148 | 155 | 155 | 150 | 142 | 155 | 153 | 150 | 156 | 163 | 157 | 157 | 148 | 147 | 152 | 147 | ||||||
| Eli Lilly & Co. | 562 | 555 | 521 | 553 | 540 | 532 | 469 | 418 | 441 | 419 | 392 | 395 | 354 | 360 | 367 | 325 | 280 | 284 | 268 | ||||||
| Gilead Sciences Inc. | 170 | 177 | 173 | 166 | 170 | 169 | 159 | 156 | 160 | 172 | 164 | 163 | 169 | 163 | 159 | 162 | 137 | 136 | 132 | ||||||
| Johnson & Johnson | 244 | 247 | 239 | 238 | 246 | 240 | 228 | 226 | 236 | 233 | 222 | 218 | 211 | 232 | 220 | 209 | 196 | 198 | 192 | ||||||
| Pfizer Inc. | 297 | 284 | 305 | 311 | 334 | 308 | 298 | 288 | 306 | 252 | 242 | 218 | 196 | 206 | 167 | 135 | 160 | 155 | 151 | ||||||
| Regeneron Pharmaceuticals Inc. | 603 | 633 | 631 | 702 | 717 | 714 | 726 | 732 | 734 | 717 | 699 | 677 | 664 | 680 | 700 | 722 | 588 | 511 | 394 | ||||||
| Thermo Fisher Scientific Inc. | 148 | 149 | 149 | 148 | 156 | 153 | 148 | 142 | 150 | 144 | 142 | 142 | 146 | 146 | 145 | 145 | 148 | 157 | 164 | ||||||
| Vertex Pharmaceuticals Inc. | 502 | 427 | 444 | 435 | 430 | 406 | 379 | 340 | 327 | 296 | 286 | 272 | 271 | 252 | 238 | 215 | 194 | 193 | 188 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 118 + 69 = 187
2 Click competitor name to see calculations.
The overall operating cycle demonstrates a period of gradual expansion followed by a significant contraction toward the end of the observed timeframe. The total cycle duration reached its maximum in mid-2025, with movements primarily driven by fluctuations in inventory management rather than credit collection efficiency.
- Average Inventory Processing Period
- A fluctuating trend is evident, starting at 133 days in March 2022 and experiencing a prolonged increase to a peak of 162 days by June 2025. Following this peak, a consistent downward trend occurred, with the period decreasing to 118 days by September 2026. This trajectory suggests a phase of inventory accumulation or slower turnover followed by a strategic improvement in inventory throughput.
- Average Receivable Collection Period
- The collection period remained relatively stable throughout the entire observed period, fluctuating within a narrow band between 58 and 69 days. This lack of significant volatility indicates a consistent and disciplined approach to credit management and receivable collections, remaining largely decoupled from the variations seen in inventory processing.
- Operating Cycle
- The total operating cycle mirrored the movements of the inventory processing period. After reaching a low of 177 days in September 2022, the cycle expanded to a peak of 230 days in June 2025. The subsequent contraction to 187 days by September 2026 indicates an overall improvement in operational efficiency, specifically in the speed at which investments in inventory and receivables are converted back into cash.
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Average Payables Payment Period
Merck & Co. Inc., average payables payment period calculation (quarterly data)
| Sep 30, 2026 | Jun 30, 2026 | 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 | |||||||||||||||||||||||||
| Payables turnover | 3.78 | 4.70 | 4.44 | 3.72 | 3.53 | 3.82 | 3.98 | 3.72 | 4.26 | 4.39 | 4.48 | 4.11 | 4.59 | 4.58 | 4.34 | 4.08 | 5.16 | 4.86 | 4.25 | ||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average payables payment period1 | 96 | 78 | 82 | 98 | 103 | 95 | 92 | 98 | 86 | 83 | 81 | 89 | 80 | 80 | 84 | 89 | 71 | 75 | 86 | ||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | |||||||||||||||||||||||||
| Amgen Inc. | 95 | 90 | 91 | 72 | 85 | 89 | 70 | 54 | 61 | 73 | 60 | 69 | 70 | 64 | 73 | 90 | 69 | 72 | 78 | ||||||
| Bristol-Myers Squibb Co. | 110 | 103 | 108 | 94 | 107 | 140 | 104 | 94 | 106 | 120 | 117 | 111 | 97 | 108 | 114 | 109 | 96 | 107 | 112 | ||||||
| Danaher Corp. | 60 | 64 | 64 | 67 | 63 | 65 | 66 | 66 | 60 | 63 | 62 | 65 | 65 | 63 | 64 | 67 | 65 | 73 | 72 | ||||||
| Eli Lilly & Co. | 149 | 169 | 148 | 178 | 154 | 161 | 140 | 140 | 135 | 142 | 127 | 134 | 130 | 138 | 119 | 106 | 86 | 87 | 70 | ||||||
| Gilead Sciences Inc. | 55 | 40 | 38 | 42 | 48 | 34 | 43 | 49 | 49 | 29 | 34 | 31 | 37 | 40 | 41 | 58 | 33 | 31 | 32 | ||||||
| Johnson & Johnson | 106 | 107 | 123 | 145 | 119 | 119 | 123 | 137 | 120 | 121 | 113 | 132 | 111 | 133 | 120 | 137 | 118 | 116 | 112 | ||||||
| Pfizer Inc. | 88 | 98 | 98 | 119 | 110 | 106 | 110 | 115 | 99 | 79 | 87 | 98 | 72 | 93 | 76 | 72 | 66 | 59 | 55 | ||||||
| Regeneron Pharmaceuticals Inc. | 173 | 180 | 163 | 163 | 158 | 129 | 129 | 146 | 94 | 110 | 137 | 122 | 106 | 116 | 136 | 138 | 98 | 91 | 68 | ||||||
| Thermo Fisher Scientific Inc. | 40 | 43 | 46 | 50 | 44 | 43 | 44 | 45 | 38 | 37 | 37 | 41 | 35 | 34 | 39 | 48 | 37 | 41 | 46 | ||||||
| Vertex Pharmaceuticals Inc. | 92 | 89 | 106 | 102 | 95 | 102 | 105 | 98 | 98 | 85 | 96 | 106 | 117 | 115 | 107 | 103 | 44 | 73 | 66 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.78 = 96
2 Click competitor name to see calculations.
The analysis of operating activity ratios indicates a fluctuating trend in the management of accounts payable over the observed period, characterized by a significant extension of the payment cycle between 2024 and 2025.
- Payables Turnover Trends
- A period of relative stability and peak efficiency was observed through 2022 and 2023, with the turnover ratio reaching its highest point of 5.16 in September 2022. A sustained decline followed starting in late 2023, with the ratio reaching a minimum of 3.53 by September 2025. A recovery is evident in the first half of 2026, where the ratio climbed to 4.70 before receding to 3.78 by September 2026.
- Average Payables Payment Period
- The payment cycle exhibited an inverse relationship with the turnover ratio. The shortest payment duration occurred in September 2022 at 71 days. A progressive increase in the payment period is noted starting in late 2024, culminating in a peak of 103 days in September 2025. This indicates a trend toward extending the time taken to settle obligations with suppliers. By the first half of 2026, the period contracted sharply to 78 days, reflecting an acceleration of payments, before increasing again to 96 days by September 2026.
- Working Capital Insights
- The extension of the payment period during 2024 and 2025 suggests a period of enhanced liquidity preservation. The subsequent volatility observed in 2026, specifically the rapid drop to 78 days followed by a rise to 96 days, indicates a lack of stability in short-term liability management or the influence of non-recurring payment events.
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Cash Conversion Cycle
Merck & Co. Inc., cash conversion cycle calculation (quarterly data)
No. days
| Sep 30, 2026 | Jun 30, 2026 | 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 | |||||||||||||||||||||||||
| Average inventory processing period | 118 | 126 | 138 | 148 | 160 | 162 | 150 | 147 | 149 | 153 | 151 | 144 | 139 | 137 | 134 | 124 | 118 | 119 | 133 | ||||||
| Average receivable collection period | 69 | 69 | 68 | 66 | 69 | 68 | 62 | 58 | 66 | 68 | 68 | 63 | 64 | 69 | 66 | 58 | 59 | 62 | 66 | ||||||
| Average payables payment period | 96 | 78 | 82 | 98 | 103 | 95 | 92 | 98 | 86 | 83 | 81 | 89 | 80 | 80 | 84 | 89 | 71 | 75 | 86 | ||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Cash conversion cycle1 | 91 | 117 | 124 | 116 | 126 | 135 | 120 | 107 | 129 | 138 | 138 | 118 | 123 | 126 | 116 | 93 | 106 | 106 | 113 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | |||||||||||||||||||||||||
| Amgen Inc. | 213 | 208 | 194 | 216 | 195 | 200 | 216 | 222 | 234 | 270 | 349 | 441 | 277 | 285 | 290 | 273 | 282 | 267 | 245 | ||||||
| Danaher Corp. | 107 | 108 | 86 | 81 | 92 | 90 | 84 | 76 | 95 | 90 | 88 | 91 | 98 | 94 | 93 | 81 | 82 | 79 | 75 | ||||||
| Eli Lilly & Co. | 413 | 386 | 373 | 375 | 386 | 371 | 329 | 278 | 306 | 277 | 265 | 261 | 224 | 222 | 248 | 219 | 194 | 197 | 198 | ||||||
| Gilead Sciences Inc. | 115 | 137 | 135 | 124 | 122 | 135 | 116 | 107 | 111 | 143 | 130 | 132 | 132 | 123 | 118 | 104 | 104 | 105 | 100 | ||||||
| Johnson & Johnson | 138 | 140 | 116 | 93 | 127 | 121 | 105 | 89 | 116 | 112 | 109 | 86 | 100 | 99 | 100 | 72 | 78 | 82 | 80 | ||||||
| Pfizer Inc. | 209 | 186 | 207 | 192 | 224 | 202 | 188 | 173 | 207 | 173 | 155 | 120 | 124 | 113 | 91 | 63 | 94 | 96 | 96 | ||||||
| Regeneron Pharmaceuticals Inc. | 430 | 453 | 468 | 539 | 559 | 585 | 597 | 586 | 640 | 607 | 562 | 555 | 558 | 564 | 564 | 584 | 490 | 420 | 326 | ||||||
| Thermo Fisher Scientific Inc. | 108 | 106 | 103 | 98 | 112 | 110 | 104 | 97 | 112 | 107 | 105 | 101 | 111 | 112 | 106 | 97 | 111 | 116 | 118 | ||||||
| Vertex Pharmaceuticals Inc. | 410 | 338 | 338 | 333 | 335 | 304 | 274 | 242 | 229 | 211 | 190 | 166 | 154 | 137 | 131 | 112 | 150 | 120 | 122 | ||||||
Based on: 10-Q (reporting date: 2026-09-30), 10-Q (reporting date: 2026-06-30), 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 Q3 2026 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 118 + 69 – 96 = 91
2 Click competitor name to see calculations.
The cash conversion cycle exhibited significant volatility over the analyzed period, characterized by a gradual expansion that peaked in early 2024 followed by a marked contraction toward the end of the series. The overall cycle transitioned from 113 days in March 2022 to a low of 91 days by September 2026, reflecting fluctuating efficiency in working capital management.
- Average Inventory Processing Period
- A cyclical pattern is observed in inventory management. After an initial decline to 118 days in September 2022, the processing period entered a prolonged upward trend, reaching a peak of 162 days in June 2025. This indicates a period of slower inventory turnover. However, a sharp corrective trend followed in the final quarters, with the period receding to 118 days by September 2026, returning to levels seen four years prior.
- Average Receivable Collection Period
- The collection of receivables remained relatively stable throughout the period, fluctuating within a narrow range between 58 and 69 days. While there was a slight increase in the average collection time starting in early 2023, the period stabilized around 68 to 69 days from March 2026 through September 2026, suggesting consistent credit and collection policies.
- Average Payables Payment Period
- The payables payment period demonstrated notable volatility with an overall upward shift in the latter half of the timeline. After fluctuating between 71 and 89 days in 2022, the period reached a maximum of 103 days in September 2025. This extension in payment terms served as a strategic offset to the increased inventory holding times observed during the same period.
- Cash Conversion Cycle Synthesis
- The overall cash conversion cycle was primarily driven by movements in inventory processing. The peak cycle length of 138 days in the first half of 2024 coincided with the rising inventory period. The subsequent reduction to 91 days by September 2026 was achieved through a combination of significantly improved inventory turnover and the maintenance of relatively long payables payment periods.
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