Merck & Company Inc (MRK)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 7,315,000 | 8,918,000 | 13,552,000 | 5,103,000 | 3,023,000 | 8,506,000 | 6,396,000 | 16,179,000 | 17,398,000 | 17,703,000 | 19,339,000 | 16,867,000 | 15,377,000 | 9,507,000 | 7,573,000 | 8,930,000 | 9,363,000 | 14,062,000 | 13,110,000 | 13,021,000 |
| Long-term debt | US$ in thousands | 34,462,000 | 34,982,000 | 34,717,000 | 31,142,000 | 33,683,000 | 33,972,000 | 34,072,000 | 28,074,000 | 28,745,000 | 28,482,000 | 28,684,000 | 30,586,000 | 30,690,000 | 22,907,000 | 24,033,000 | 24,002,000 | 25,360,000 | 26,321,000 | 26,156,000 | 21,637,000 |
| Total stockholders’ equity | US$ in thousands | 46,313,000 | 44,502,000 | 43,582,000 | 40,364,000 | 37,581,000 | 41,246,000 | 38,693,000 | 46,834,000 | 45,991,000 | 44,458,000 | 43,243,000 | 40,883,000 | 38,184,000 | 35,794,000 | 33,294,000 | 26,945,000 | 25,317,000 | 29,186,000 | 27,642,000 | 26,205,000 |
| Return on total capital | 9.06% | 11.22% | 17.31% | 7.14% | 4.24% | 11.31% | 8.79% | 21.60% | 23.28% | 24.27% | 26.89% | 23.60% | 22.33% | 16.20% | 13.21% | 17.53% | 18.48% | 25.33% | 24.37% | 27.22% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $7,315,000K ÷ ($34,462,000K + $46,313,000K)
= 9.06%
The return on total capital for Merck & Company Inc has shown fluctuating trends over the past few years. In the most recent quarter, March 31, 2024, the return on total capital was 7.14%, indicating a decrease compared to the previous quarter. This decrease suggests that the company may be experiencing challenges in generating returns relative to its total capital employed.
Looking at the trend over the past few quarters, we see that the return on total capital peaked at 27.22% on March 31, 2020, and has since experienced ups and downs. While the return on total capital has shown some volatility, it has generally trended downwards in recent quarters, with occasional spikes.
Overall, it is important for investors and stakeholders to monitor the return on total capital metric closely, as it provides insight into how efficiently the company is utilizing its capital to generate profits. A declining trend in return on total capital may indicate inefficiencies or challenges in the company's operations and should prompt further investigation into the underlying factors driving this trend.
Peer comparison
Dec 31, 2024