Merck & Company Inc (MRK)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.36 | 1.36 | 1.47 | 1.25 | 1.25 | 1.38 | 1.28 | 1.44 | 1.47 | 1.46 | 1.39 | 1.40 | 1.27 | 1.31 | 1.31 | 1.02 | 1.02 | 1.30 | 1.32 | 1.11 |
| Quick ratio | 0.88 | 0.91 | 0.92 | 0.71 | 0.71 | 0.91 | 0.74 | 0.90 | 0.93 | 0.90 | 0.85 | 0.84 | 0.73 | 0.86 | 0.82 | 0.64 | 0.65 | 0.85 | 0.90 | 0.70 |
| Cash ratio | 0.51 | 0.53 | 0.48 | 0.26 | 0.31 | 0.46 | 0.27 | 0.45 | 0.54 | 0.49 | 0.44 | 0.40 | 0.34 | 0.50 | 0.46 | 0.33 | 0.36 | 0.43 | 0.56 | 0.35 |
The current ratio of Merck & Company Inc has exhibited fluctuating trends over the past few years, ranging from 1.02 to 1.47. This ratio has generally remained above 1, indicating that the company has had sufficient current assets to cover its current liabilities throughout the period. The current ratio peaked at 1.47 on June 30, 2024, reflecting a strong short-term liquidity position.
The quick ratio, which excludes inventory from current assets, has followed a similar pattern, with values ranging between 0.64 and 0.93. This ratio also stayed above 1 on most occasions, suggesting that Merck & Company Inc could meet its short-term obligations without relying on inventory liquidity. The highest quick ratio of 0.93 was reported on December 31, 2022, indicating a strong ability to cover immediate liabilities with liquid assets.
The cash ratio, representing the most stringent measure of liquidity, has displayed variability between 0.26 and 0.56. Despite experiencing fluctuations, the cash ratio generally remained at reasonable levels, above 0.30, which signals the company's capacity to settle its short-term debts with cash and cash equivalents. The highest cash ratio of 0.56 was recorded on June 30, 2020, indicating a robust cash position at that time.
Overall, the liquidity ratios of Merck & Company Inc demonstrate consistent liquidity levels, with the company maintaining a healthy ability to meet its short-term obligations using a mix of current assets and liquid resources.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 84.81 | 99.54 | 105.43 | 105.09 | 92.97 | 96.54 | 100.25 | 93.00 | 77.92 | 86.26 | 87.28 | 93.64 | 87.66 | 94.82 | 84.53 | 100.21 | 81.24 | 117.54 | 107.51 | 103.58 |
The cash conversion cycle for Merck & Company Inc has shown some fluctuations over the periods indicated in the data provided. The cash conversion cycle represents the time it takes for a company to convert its investment in inventory and other inputs into cash flows from sales.
Analyzing the data, we observe that the cash conversion cycle ranged between a high of 117.54 days on September 30, 2020, and a low of 77.92 days on December 31, 2022. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital, while a higher cycle may suggest inefficiencies in its operations.
It is noteworthy that there have been periods of improvement in the cash conversion cycle from December 31, 2020, when it was at 81.24 days, to December 31, 2022, when it reached 77.92 days. However, there were also periods where the cycle increased, such as the peak of 117.54 days on September 30, 2020.
Overall, it is essential for Merck & Company Inc to continue monitoring and managing its cash conversion cycle effectively to ensure optimal utilization of working capital and maintain liquidity levels. A well-managed cash conversion cycle can contribute to improved financial performance and sustainability in the long term.