Merck & Company Inc (MRK)

Debt-to-capital ratio

		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
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
Debt-to-capital ratio		0.43	0.44	0.44	0.44	0.47	0.45	0.47	0.37	0.38	0.39	0.40	0.43	0.45	0.39	0.42	0.47	0.50	0.47	0.49	0.45

December 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $34,462,000K ÷ ($34,462,000K + $46,313,000K)
= 0.43

The debt-to-capital ratio of Merck & Company Inc has fluctuated over the past few years, ranging from 0.37 to 0.50. This ratio represents the proportion of the company's capital that is financed through debt. A lower debt-to-capital ratio indicates a lower level of financial risk, as it suggests that the company relies more on equity financing rather than debt.

In the case of Merck & Company Inc, the ratio has generally been trending downwards from 0.50 in December 2020 to 0.43 in December 2024. This decreasing trend indicates that the company may be reducing its reliance on debt to fund its operations and investments, which could improve its financial stability and sustainability in the long term.

However, it is important to note that a debt-to-capital ratio of around 0.43 to 0.47 is still considered to be within a reasonable range for most companies, as it strikes a balance between debt and equity financing. Overall, the trend in Merck & Company Inc's debt-to-capital ratio suggests a prudent approach to managing its capital structure and financial leverage.