Stock Analysis on Net
Stock Analysis on Net

Merck & Co. Inc. (NYSE:MRK)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Merck & Co. Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = ROA × Financial Leverage
Sep 30, 2024 27.30% = 10.34% × 2.64
Jun 30, 2024 31.52% = 12.20% × 2.58
Mar 31, 2024 5.71% = 2.18% × 2.62
Dec 31, 2023 0.97% = 0.34% × 2.84
Sep 30, 2023 11.17% = 4.32% × 2.59
Jun 30, 2023 8.04% = 2.98% × 2.70
Mar 31, 2023 27.82% = 12.09% × 2.30
Dec 31, 2022 31.57% = 13.30% × 2.37
Sep 30, 2022 34.32% = 14.25% × 2.41
Jun 30, 2022 38.34% = 15.48% × 2.48
Mar 31, 2022 34.68% = 13.29% × 2.61
Dec 31, 2021 34.17% = 12.35% × 2.77
Sep 30, 2021 20.10% = 7.70% × 2.61
Jun 30, 2021 16.73% = 6.14% × 2.72
Mar 31, 2021 26.08% = 7.73% × 3.37
Dec 31, 2020 27.91% = 7.72% × 3.62
Sep 30, 2020 39.47% = 12.83% × 3.08
Jun 30, 2020 37.91% = 11.56% × 3.28
Mar 31, 2020 38.72% = 11.95% × 3.24
Dec 31, 2019 37.99% = 11.66% × 3.26
Sep 30, 2019 — = — × 3.10
Jun 30, 2019 — = — × 3.04
Mar 31, 2019 — = — × 2.99

Based on: 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), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the decrease in return on equity ratio (ROE) over Q3 2024 is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Merck & Co. Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Sep 30, 2024 27.30% = 19.23% × 0.54 × 2.64
Jun 30, 2024 31.52% = 21.98% × 0.55 × 2.58
Mar 31, 2024 5.71% = 3.76% × 0.58 × 2.62
Dec 31, 2023 0.97% = 0.61% × 0.56 × 2.84
Sep 30, 2023 11.17% = 7.77% × 0.56 × 2.59
Jun 30, 2023 8.04% = 5.34% × 0.56 × 2.70
Mar 31, 2023 27.82% = 22.52% × 0.54 × 2.30
Dec 31, 2022 31.57% = 24.49% × 0.54 × 2.37
Sep 30, 2022 34.32% = 25.88% × 0.55 × 2.41
Jun 30, 2022 38.34% = 29.00% × 0.53 × 2.48
Mar 31, 2022 34.68% = 26.27% × 0.51 × 2.61
Dec 31, 2021 34.17% = 26.79% × 0.46 × 2.77
Sep 30, 2021 20.10% = 15.09% × 0.51 × 2.61
Jun 30, 2021 16.73% = 11.83% × 0.52 × 2.72
Mar 31, 2021 26.08% = 15.09% × 0.51 × 3.37
Dec 31, 2020 27.91% = 14.72% × 0.52 × 3.62
Sep 30, 2020 39.47% = 24.33% × 0.53 × 3.08
Jun 30, 2020 37.91% = 22.20% × 0.52 × 3.28
Mar 31, 2020 38.72% = 21.10% × 0.57 × 3.24
Dec 31, 2019 37.99% = 21.01% × 0.55 × 3.26
Sep 30, 2019 — = — × — × 3.10
Jun 30, 2019 — = — × — × 3.04
Mar 31, 2019 — = — × — × 2.99

Based on: 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), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the decrease in return on equity ratio (ROE) over Q3 2024 is the decrease in profitability measured by net profit margin ratio.

Two-Component Disaggregation of ROA

Merck & Co. Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Sep 30, 2024 10.34% = 19.23% × 0.54
Jun 30, 2024 12.20% = 21.98% × 0.55
Mar 31, 2024 2.18% = 3.76% × 0.58
Dec 31, 2023 0.34% = 0.61% × 0.56
Sep 30, 2023 4.32% = 7.77% × 0.56
Jun 30, 2023 2.98% = 5.34% × 0.56
Mar 31, 2023 12.09% = 22.52% × 0.54
Dec 31, 2022 13.30% = 24.49% × 0.54
Sep 30, 2022 14.25% = 25.88% × 0.55
Jun 30, 2022 15.48% = 29.00% × 0.53
Mar 31, 2022 13.29% = 26.27% × 0.51
Dec 31, 2021 12.35% = 26.79% × 0.46
Sep 30, 2021 7.70% = 15.09% × 0.51
Jun 30, 2021 6.14% = 11.83% × 0.52
Mar 31, 2021 7.73% = 15.09% × 0.51
Dec 31, 2020 7.72% = 14.72% × 0.52
Sep 30, 2020 12.83% = 24.33% × 0.53
Jun 30, 2020 11.56% = 22.20% × 0.52
Mar 31, 2020 11.95% = 21.10% × 0.57
Dec 31, 2019 11.66% = 21.01% × 0.55
Sep 30, 2019 — = — × —
Jun 30, 2019 — = — × —
Mar 31, 2019 — = — × —

Based on: 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), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the decrease in return on assets ratio (ROA) over Q3 2024 is the decrease in profitability measured by net profit margin ratio.