Merck & Company Inc (MRK)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 33,683,000 | 28,745,000 | 30,690,000 | 25,360,000 | 22,736,000 |
| Total stockholders’ equity | US$ in thousands | 37,581,000 | 45,991,000 | 38,184,000 | 25,317,000 | 25,907,000 |
| Debt-to-equity ratio | 0.90 | 0.63 | 0.80 | 1.00 | 0.88 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $33,683,000K ÷ $37,581,000K
= 0.90
The debt-to-equity ratio of Merck & Co Inc has exhibited fluctuations over the past five years. In 2023, the ratio stood at 0.93, demonstrating an increase from the previous year's ratio of 0.67 in 2022. This suggests that the company relied more on debt financing relative to equity in 2023 compared to 2022.
Comparing the 2023 ratio to earlier years, we observe a downward trend following the peak ratio of 1.26 in 2020. The decrease in the debt-to-equity ratio from 2020 to 2023 may indicate that the company has been gradually reducing its debt levels or increasing equity investments.
While a higher debt-to-equity ratio can imply increased financial risk due to a higher proportion of debt in the capital structure, a lower ratio may indicate a more conservative financial position. Therefore, investors and analysts may view Merck & Co Inc's decreasing trend in the debt-to-equity ratio positively in terms of financial stability and risk management.
Peer comparison
Dec 31, 2023