Merck & Company Inc (MRK)

Liquidity ratios

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
Current ratio 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 1.24 1.26 1.21 1.37
Quick ratio 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 0.85 0.84 0.81 0.96
Cash ratio 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 0.54 0.43 0.41 0.55

Merck & Co Inc's liquidity ratios for the last eight quarters show a fluctuating trend. The current ratio, which measures the company's ability to meet short-term obligations with current assets, ranged from 1.25 to 1.47. This indicates that the company had between 1.25 and 1.47 times more current assets than current liabilities during this period.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, ranged from 1.00 to 1.23 over the same period. This suggests that Merck & Co Inc had between 1.00 and 1.23 times more liquid assets to cover its short-term obligations.

The cash ratio, which assesses the company's ability to cover immediate liabilities with its cash and cash equivalents, fluctuated between 0.56 and 0.84. This implies that Merck & Co Inc had between 0.56 and 0.84 dollars in cash and equivalents for every dollar of current liabilities.

Overall, while the current and quick ratios generally remained above 1, indicating a healthy liquidity position, the downward trend in the cash ratio warrants further monitoring to ensure the company's ability to meet its short-term obligations.

See also:

Merck & Company Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

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
Cash conversion cycle days 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 92.66 101.50 102.15 101.07

The cash conversion cycle of Merck & Co Inc has shown some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 117.97 days, which decreased from the previous quarter but was higher than the levels seen in Q2 and Q3 2023. This indicates that the company took less time to convert its investments in inventory and other resources into cash during the fourth quarter.

Overall, the trend in the cash conversion cycle has been somewhat volatile, with periods of increase and decrease. However, compared to the same quarter in the previous year, the cash conversion cycle has generally been longer in recent quarters, indicating potential challenges in effectively managing working capital and converting investments into cash.

The average cash conversion cycle for the past eight quarters is approximately 115 days, suggesting that Merck & Co Inc typically takes around 115 days to convert investments in inventory and other resources into cash. Further analysis of the components of the cash conversion cycle, such as days inventory outstanding, days sales outstanding, and days payable outstanding, could provide insights into specific areas for improvement in working capital management.