Stock Analysis on Net
Stock Analysis on Net

Merck & Co. Inc. (NYSE:MRK)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Merck & Co. Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Goodwill 21,668 21,197 21,204 21,264 20,238
Product rights 29,988 23,643 23,555 23,671 45,087
IPR&D 430 6,816 7,661 9,281 3,228
Trade names 2,881 2,881 2,879 2,882 2,882
Licenses and other 8,863 8,263 7,651 6,604 6,400
Other acquired intangibles, gross carrying amount 42,162 41,603 41,746 42,438 57,597
Accumulated amortization (25,792) (23,592) (21,477) (19,505) (42,993)
Other acquired intangibles, net 16,370 18,011 20,269 22,933 14,604
Goodwill and other intangibles 38,038 39,208 41,473 44,197 34,842

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).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Merck & Co. Inc. goodwill decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.
Other acquired intangibles, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Merck & Co. Inc. other acquired intangibles, net decreased from 2022 to 2023 and from 2023 to 2024.
Goodwill and other intangibles Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Merck & Co. Inc. goodwill and other intangibles decreased from 2022 to 2023 and from 2023 to 2024.

Adjustments to Financial Statements: Removal of Goodwill

Merck & Co. Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported) 117,106 106,675 109,160 105,694 91,588
Less: Goodwill 21,668 21,197 21,204 21,264 20,238
Total assets (adjusted) 95,438 85,478 87,956 84,430 71,350
Adjustment to Total Merck & Co., Inc. Stockholders’ Equity
Total Merck & Co., Inc. stockholders’ equity (as reported) 46,313 37,581 45,991 38,184 25,317
Less: Goodwill 21,668 21,197 21,204 21,264 20,238
Total Merck & Co., Inc. stockholders’ equity (adjusted) 24,645 16,384 24,787 16,920 5,079

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).

Merck & Co. Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Merck & Co. Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Total Asset Turnover
Reported total asset turnover 0.55 0.56 0.54 0.46 0.52
Adjusted total asset turnover 0.67 0.70 0.67 0.58 0.67
Financial Leverage
Reported financial leverage 2.53 2.84 2.37 2.77 3.62
Adjusted financial leverage 3.87 5.22 3.55 4.99 14.05
Return on Equity (ROE)
Reported ROE 36.96% 0.97% 31.57% 34.17% 27.91%
Adjusted ROE 69.45% 2.23% 58.58% 77.12% 139.14%
Return on Assets (ROA)
Reported ROA 14.62% 0.34% 13.30% 12.35% 7.72%
Adjusted ROA 17.94% 0.43% 16.51% 15.46% 9.90%

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).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Merck & Co. Inc. adjusted total asset turnover ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Merck & Co. Inc. adjusted financial leverage ratio increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Merck & Co. Inc. adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Merck & Co. Inc. adjusted ROA deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

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

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Sales 64,168 60,115 59,283 48,704 47,994
Total assets 117,106 106,675 109,160 105,694 91,588
Activity Ratio
Total asset turnover1 0.55 0.56 0.54 0.46 0.52
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Sales 64,168 60,115 59,283 48,704 47,994
Adjusted total assets 95,438 85,478 87,956 84,430 71,350
Activity Ratio
Adjusted total asset turnover2 0.67 0.70 0.67 0.58 0.67

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).

2024 Calculations

1 Total asset turnover = Sales ÷ Total assets
= 64,168 ÷ 117,106 = 0.55

2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 64,168 ÷ 95,438 = 0.67

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Merck & Co. Inc. adjusted total asset turnover ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
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
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 95,438 85,478 87,956 84,430 71,350
Adjusted total Merck & Co., Inc. stockholders’ equity 24,645 16,384 24,787 16,920 5,079
Solvency Ratio
Adjusted financial leverage2 3.87 5.22 3.55 4.99 14.05

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).

2024 Calculations

1 Financial leverage = Total assets ÷ Total Merck & Co., Inc. stockholders’ equity
= 117,106 ÷ 46,313 = 2.53

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Merck & Co., Inc. stockholders’ equity
= 95,438 ÷ 24,645 = 3.87

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Merck & Co. Inc. adjusted financial leverage ratio increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 17,117 365 14,519 13,049 7,067
Total Merck & Co., Inc. stockholders’ equity 46,313 37,581 45,991 38,184 25,317
Profitability Ratio
ROE1 36.96% 0.97% 31.57% 34.17% 27.91%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 17,117 365 14,519 13,049 7,067
Adjusted total Merck & Co., Inc. stockholders’ equity 24,645 16,384 24,787 16,920 5,079
Profitability Ratio
Adjusted ROE2 69.45% 2.23% 58.58% 77.12% 139.14%

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).

2024 Calculations

1 ROE = 100 × Net income attributable to Merck & Co., Inc. ÷ Total Merck & Co., Inc. stockholders’ equity
= 100 × 17,117 ÷ 46,313 = 36.96%

2 Adjusted ROE = 100 × Net income attributable to Merck & Co., Inc. ÷ Adjusted total Merck & Co., Inc. stockholders’ equity
= 100 × 17,117 ÷ 24,645 = 69.45%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Merck & Co. Inc. adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 17,117 365 14,519 13,049 7,067
Total assets 117,106 106,675 109,160 105,694 91,588
Profitability Ratio
ROA1 14.62% 0.34% 13.30% 12.35% 7.72%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc. 17,117 365 14,519 13,049 7,067
Adjusted total assets 95,438 85,478 87,956 84,430 71,350
Profitability Ratio
Adjusted ROA2 17.94% 0.43% 16.51% 15.46% 9.90%

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).

2024 Calculations

1 ROA = 100 × Net income attributable to Merck & Co., Inc. ÷ Total assets
= 100 × 17,117 ÷ 117,106 = 14.62%

2 Adjusted ROA = 100 × Net income attributable to Merck & Co., Inc. ÷ Adjusted total assets
= 100 × 17,117 ÷ 95,438 = 17.94%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Merck & Co. Inc. adjusted ROA deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.