Merck & Company Inc (MRK)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 6,841,000 | 12,694,000 | 8,096,000 | 8,050,000 | 9,676,000 |
| Short-term investments | US$ in thousands | 1,016,000 | 498,000 | 0 | 1,787,000 | 2,361,000 |
| Receivables | US$ in thousands | 10,349,000 | 9,450,000 | 9,230,000 | 7,851,000 | 6,778,000 |
| Total current liabilities | US$ in thousands | 25,694,000 | 24,239,000 | 23,872,000 | 27,327,000 | 22,220,000 |
| Quick ratio | 0.71 | 0.93 | 0.73 | 0.65 | 0.85 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($6,841,000K
+ $1,016,000K
+ $10,349,000K)
÷ $25,694,000K
= 0.71
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio equal to 1 indicates that a company's current assets, excluding inventory, are just sufficient to cover its current liabilities.
For Merck & Co Inc, the quick ratio has fluctuated over the past five years. In 2023, the quick ratio stood at 1.00, suggesting a strengthening in the company's ability to meet short-term obligations using its liquid assets. This ratio was higher compared to 2021 and 2020, indicating improved liquidity and solvency. The quick ratio was highest in 2022 at 1.23, indicating a peak in liquidity in that year.
It is worth noting that in 2020 and 2019, the quick ratio was below 1, indicating potential liquidity challenges in meeting short-term obligations with available liquid assets alone.
Overall, the trend of Merck & Co Inc's quick ratio reflects varying levels of liquidity and financial health over the five-year period, with improvements evident in recent years. Investors and stakeholders may view a quick ratio of around 1 as favorable, indicating a balanced and sufficient level of short-term liquidity.
Peer comparison
Dec 31, 2023