Merck & Company Inc (MRK)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 64,168,000 | 60,115,000 | 59,283,000 | 48,704,000 | 41,518,000 |
| Total current assets | US$ in thousands | 38,782,000 | 32,168,000 | 35,722,000 | 30,266,000 | 27,764,000 |
| Total current liabilities | US$ in thousands | 28,420,000 | 25,694,000 | 24,239,000 | 23,872,000 | 27,327,000 |
| Working capital turnover | 6.19 | 9.29 | 5.16 | 7.62 | 95.01 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $64,168,000K ÷ ($38,782,000K – $28,420,000K)
= 6.19
The working capital turnover ratio for Merck & Company Inc has shown a significant decline over the period from December 31, 2020, to December 31, 2024. In 2020, the ratio was notably high at 95.01, indicating that the company was efficiently using its working capital to generate sales revenue. However, this efficiency deteriorated in the following years with a substantial decrease to 7.62 in 2021, 5.16 in 2022, 9.29 in 2023, and 6.19 in 2024.
The declining trend in the working capital turnover ratio suggests that the company may be facing challenges in managing its working capital effectively to support its business operations and sales generation. A lower ratio indicates that the company is not utilizing its working capital efficiently to generate revenue, which could potentially impact its liquidity and overall financial performance.
It is crucial for Merck & Company Inc to assess and improve its working capital management practices to enhance operational efficiency, optimize cash flow, and maintain sustainable business growth in the future.
Peer comparison
Dec 31, 2024