Merck & Co. Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income attributable to Merck & Co., Inc.	17,117)	365)	14,519)	13,049)	7,067)
Net income attributable to noncontrolling interests	16)	12)	7)	13)	15)
Net noncash charges	8,002)	14,834)	7,351)	3,899)	7,761)
Net changes in assets and liabilities	(3,667)	(2,205)	(2,782)	(3,839)	(4,590)
Net cash provided by operating activities	21,468)	13,006)	19,095)	13,122)	10,253)
Interest paid, net of tax¹	1,117)	220)	827)	693)	663)
Capital expenditures	(3,372)	(3,863)	(4,388)	(4,448)	(4,684)
Free cash flow to the firm (FCFF)	19,213)	9,363)	15,534)	9,367)	6,232)

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).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Merck & Co. Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Merck & Co. Inc. FCFF decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Merck & Co. Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Effective Income Tax Rate (EITR)
EITR¹	14.10%	80.00%	11.70%	11.00%	19.40%
Interest Paid, Net of Tax
Interest paid, before tax	1,300)	1,100)	937)	779)	822)
Less: Interest paid, tax²	183)	880)	110)	86)	159)
Interest paid, net of tax	1,117)	220)	827)	693)	663)

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 See details »

² 2024 Calculation
Interest paid, tax = Interest paid × EITR
= 1,300 × 14.10% = 183

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Merck & Co. Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	222,381)
Free cash flow to the firm (FCFF)	19,213)
Valuation Ratio
EV/FCFF	11.57
Benchmarks
EV/FCFF, Competitors¹
AbbVie Inc.	18.66
Amgen Inc.	14.82
Bristol-Myers Squibb Co.	8.94
Danaher Corp.	27.48
Eli Lilly & Co.	192.52
Gilead Sciences Inc.	13.60
Johnson & Johnson	17.95
Pfizer Inc.	13.65
Regeneron Pharmaceuticals Inc.	15.52
Thermo Fisher Scientific Inc.	21.55
Vertex Pharmaceuticals Inc.	—
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences	22.03
EV/FCFF, Industry
Health Care	22.20

Based on: 10-K (reporting date: 2024-12-31).

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Merck & Co. Inc., historical EV/FCFF 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)
Enterprise value (EV)¹	254,436)	354,322)	296,532)	217,996)	212,628)
Free cash flow to the firm (FCFF)²	19,213)	9,363)	15,534)	9,367)	6,232)
Valuation Ratio
EV/FCFF³	13.24	37.84	19.09	23.27	34.12
Benchmarks
EV/FCFF, Competitors⁴
AbbVie Inc.	20.05	14.89	12.15	13.18	13.95
Amgen Inc.	15.35	22.22	16.01	15.82	14.51
Bristol-Myers Squibb Co.	9.94	9.14	13.87	10.52	11.63
Danaher Corp.	28.93	36.34	25.74	28.25	30.66
Eli Lilly & Co.	200.93	655.33	59.14	38.37	39.01
Gilead Sciences Inc.	14.50	13.41	13.58	8.42	13.60
Johnson & Johnson	18.16	19.30	23.80	21.25	20.75
Pfizer Inc.	15.33	32.24	9.15	8.40	21.74
Regeneron Pharmaceuticals Inc.	19.30	23.99	17.96	9.81	25.74
Thermo Fisher Scientific Inc.	26.13	28.85	31.61	33.14	26.14
Vertex Pharmaceuticals Inc.	—	29.45	16.68	22.47	16.00
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences	23.57	27.24	17.95	16.12	19.74
EV/FCFF, Industry
Health Care	23.63	24.95	17.94	17.18	18.55

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 See details »

² See details »

³ 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 254,436 ÷ 19,213 = 13.24

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Merck & Co. Inc. EV/FCFF ratio increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Merck & Co. Inc. (NYSE:MRK)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical