Merck & Company Inc (MRK)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	17,117,000	365,000	14,519,000	13,049,000	7,067,000
Total stockholders’ equity	US$ in thousands	46,313,000	37,581,000	45,991,000	38,184,000	25,317,000
ROE		36.96%	0.97%	31.57%	34.17%	27.91%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $17,117,000K ÷ $46,313,000K
= 36.96%

Analyzing Merck & Company Inc's return on equity (ROE) over the past five years reveals fluctuations in performance. In 2020, the ROE stood at 27.91%, indicating that for every dollar of shareholders' equity, the company generated a profit of $0.2791. This metric improved in 2021, reaching 34.17%, reflecting enhanced profitability and efficiency in asset utilization.

However, in 2022, the ROE experienced a slight decline to 31.57%, suggesting a potential slowdown in financial performance or changes in capital structure. The following year, in 2023, Merck & Company Inc's ROE dropped significantly to 0.97%, indicating challenges in generating profits relative to shareholders' equity.

Nevertheless, the company recovered strongly in 2024, with the ROE soaring to 36.96%, surpassing the 2021 levels. This resurgence signals improved profitability and efficient capital management, potentially driven by strategic initiatives or operational improvements.

Overall, while Merck & Company Inc demonstrated fluctuations in ROE over the past five years, the recent rebound to 36.96% in 2024 reflects positive momentum and a return to robust profitability levels. It will be essential for stakeholders to monitor future financial performance to assess the sustainability of these improvements and ensure continued value creation for shareholders.