Merck & Company Inc (MRK)

Fixed asset turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	60,114,000	59,314,000	58,311,000	57,869,000	59,283,000	58,974,000	57,169,000	53,978,000	48,704,000	46,131,000	43,906,000	41,857,000	43,287,000	36,488,000	37,956,000	40,363,000	39,122,000	45,971,000	44,368,000	43,073,000
Property, plant and equipment	US$ in thousands	23,051,000	22,526,000	22,231,000	21,758,000	21,422,000	20,424,000	20,059,000	19,747,000	19,279,000	18,565,000	18,064,000	18,295,000	17,000,000	16,919,000	15,789,000	15,269,000	14,297,000	14,287,000	13,862,000	13,506,000
Fixed asset turnover		2.61	2.63	2.62	2.66	2.77	2.89	2.85	2.73	2.53	2.48	2.43	2.29	2.55	2.16	2.40	2.64	2.74	3.22	3.20	3.19

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $60,114,000K ÷ $23,051,000K
= 2.61

The fixed asset turnover ratio for Merck & Co Inc has shown a slight decline over the past two quarters, with values ranging from 2.61 in Q4 2023 to 2.77 in Q4 2022. The ratio measures how efficiently the company is using its fixed assets to generate revenue.

A fixed asset turnover ratio of above 1 indicates that the company is generating more revenue per dollar of fixed assets, reflecting efficient asset utilization. In this case, Merck & Co Inc has consistently maintained a healthy fixed asset turnover ratio above 2, demonstrating effective management of its fixed assets to generate revenue.

Although there has been a slight decrease in the ratio over the recent quarters, the overall trend indicates that Merck & Co Inc is efficiently utilizing its fixed assets to generate revenue. It is essential for the company to continue monitoring and managing its fixed assets effectively to ensure sustainable operational efficiency and profitability.