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.