Merck & Company Inc (MRK)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 50.89% | 47.10% | 47.41% | 43.80% | 48.52% |
| Operating profit margin | -23.01% | 0.25% | -2.77% | -24.18% | -13.25% |
| Pretax margin | 3.12% | 27.73% | 29.92% | 20.25% | 29.16% |
| Net profit margin | 0.61% | 24.49% | 26.79% | 17.02% | 25.16% |
Over the past five years, Merck & Co Inc's profitability ratios have shown some fluctuations.
- Gross profit margin has generally been above 70%, indicating that the company is able to efficiently manage its production costs and generate profits on its sales.
- Operating profit margin has been volatile, with a significant decrease in 2023 compared to the previous year. This suggests that the company's operating expenses may have increased, impacting its profitability.
- The pretax margin also experienced fluctuations over the years, with a notable decrease in 2023. It shows the company's ability to control its operating expenses and generate profits before accounting for taxes.
- Net profit margin has similarly fluctuated, with a noticeable decrease in 2023. This metric provides insight into the company's ability to generate profits after all expenses, including taxes, have been accounted for.
Overall, while Merck & Co Inc has been able to maintain strong gross profit margins, the decline in operating profit margins, pretax margins, and net profit margins in 2023 suggests potential challenges in managing expenses and profitability. Further analysis would be required to understand the specific factors driving these fluctuations and their implications for the company's financial health.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -12.97% | 0.13% | -1.28% | -10.96% | -6.14% |
| Return on assets (ROA) | 0.34% | 13.30% | 12.35% | 7.72% | 11.66% |
| Return on total capital | 4.24% | 23.28% | 22.32% | 18.23% | 25.29% |
| Return on equity (ROE) | 0.97% | 31.57% | 34.17% | 27.91% | 37.99% |
Merck & Co Inc's profitability ratios have shown variability over the past five years. The operating return on assets (Operating ROA) has fluctuated, with a significant decrease from 16.75% in 2022 to 2.77% in 2023. This suggests that the company's operating efficiency in generating profits from its assets has declined.
The return on assets (ROA) has also experienced fluctuations, reaching a low of 0.34% in 2023. This indicates that the company's overall profitability relative to its total assets has decreased, reflecting potential challenges in generating earnings from its asset base.
On the other hand, the return on total capital has shown a similar trend to the Operating ROA, with a notable decrease from 23.84% in 2022 to 4.07% in 2023. This suggests that the company's overall return on its total invested capital has declined significantly.
The return on equity (ROE) has also displayed variability, with a decrease from 31.57% in 2022 to 0.97% in 2023. This indicates a lower return to shareholders compared to previous years, reflecting potential challenges in leveraging equity to generate profits.
Overall, the profitability ratios of Merck & Co Inc show a mixed performance, with decreases in key ratios such as Operating ROA, ROA, return on total capital, and ROE in 2023 compared to previous years. This suggests potential challenges in effectively utilizing assets and capital to generate profits and returns for shareholders.