Merck & Company Inc (MRK)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 60,115,000 | 59,283,000 | 48,704,000 | 41,518,000 | 39,121,000 |
| Receivables | US$ in thousands | 10,349,000 | 9,450,000 | 9,230,000 | 7,851,000 | 6,778,000 |
| Receivables turnover | 5.81 | 6.27 | 5.28 | 5.29 | 5.77 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $60,115,000K ÷ $10,349,000K
= 5.81
The receivables turnover ratio for Merck & Co Inc has fluctuated over the past five years. In 2023, the ratio stands at 5.81, which indicates that the company collected its accounts receivable approximately 5.81 times during the year. This represents a decrease compared to the previous year's ratio of 6.27.
A lower receivables turnover ratio may suggest that the company is taking longer to collect payments from its customers, which could potentially lead to cash flow issues or indicate a less efficient accounts receivable management process.
It is essential for Merck & Co Inc to assess the reasons behind the decrease in the receivables turnover ratio in 2023 and take necessary steps to improve collection efficiency and maintain a healthy cash flow position. Comparing the current ratio with industry benchmarks and historical trends can provide further insights into the company's financial performance and liquidity management.
Peer comparison
Dec 31, 2023