Merck & Company Inc (MRK)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	13,242,000	6,841,000	12,694,000	8,096,000	8,050,000
Short-term investments	US$ in thousands	1,367,000	1,016,000	498,000	0	1,787,000
Total current liabilities	US$ in thousands	28,420,000	25,694,000	24,239,000	23,872,000	27,327,000
Cash ratio		0.51	0.31	0.54	0.34	0.36

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($13,242,000K + $1,367,000K) ÷ $28,420,000K
= 0.51

The cash ratio of Merck & Company Inc has shown fluctuations over the past five years. As of December 31, 2020, the cash ratio stood at 0.36, indicating that the company had $0.36 in cash and cash equivalents for every $1 of current liabilities. The ratio decreased slightly to 0.34 by December 31, 2021, suggesting a potential decrease in the company's ability to cover its short-term obligations with available cash.

However, there was a notable improvement in the cash ratio by December 31, 2022, reaching 0.54. This could imply that Merck had significantly strengthened its cash position relative to its current liabilities. The ratio then dropped to 0.31 by December 31, 2023, potentially indicating a decrease in liquidity compared to the previous year.

By December 31, 2024, the cash ratio increased again to 0.51, demonstrating a better ability to meet short-term obligations through available cash on hand. Overall, the fluctuating trend in the cash ratio suggests varying levels of liquidity and financial strength for Merck & Company Inc during the analyzed period.