Merck ROA %

: 14.76% (As of Jun. 2022)

View and export this data going back to 1949. Start your Free Trial

ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Merck's annualized Net Income for the quarter that ended in Jun. 2022 was $15,776 Mil. Merck's average Total Assets over the quarter that ended in Jun. 2022 was $106,882 Mil. Therefore, Merck's annualized ROA % for the quarter that ended in Jun. 2022 was 14.76%.

The historical rank and industry rank for Merck's ROA % or its related term are showing as below:

MRK' s ROA % Range Over the Past 10 Years
Min: 2.61 Med: 6.57 Max: 16.46
Current: 16.46

During the past 13 years, Merck's highest ROA % was 16.46%. The lowest was 2.61%. And the median was 6.57%.

MRK's ROA % is ranked better than
93.05% of 1122 companies
in the Drug Manufacturers industry
Industry Median: 1.48 vs MRK: 16.46

Merck ROA % Historical Data

The historical data trend for Merck's ROA % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Merck Annual Data

Trend

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

ROA %

2.61

7.30

11.79

8.03

13.23

Merck Quarterly Data
	Sep17	Dec17	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22
ROA %																6.81	19.84	15.09	16.24	14.76

Competitive Comparison

For the Drug Manufacturers - General subindustry, Merck's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Annual Data Quarterly Data

Merck ROA % Distribution

For the Drug Manufacturers industry and Healthcare sector, Merck's ROA % distribution charts can be found below:

* The bar in red indicates where Merck's ROA % falls into.

Merck ROA % Calculation

Merck's annualized ROA % for the fiscal year that ended in Dec. 2021 is calculated as:

ROA %	=	Net Income (A: Dec. 2021 )	/	( (Total Assets (A: Dec. 2020 )	+	Total Assets (A: Dec. 2021 ))	/ count )
	=	13049	/	( (91588	+	105694)	/ 2 )
	=	13049	/	98641
	=	13.23 %

Merck's annualized ROA % for the quarter that ended in Jun. 2022 is calculated as:

ROA %	=	Net Income (Q: Jun. 2022 )	/	( (Total Assets (Q: Mar. 2022 )	+	Total Assets (Q: Jun. 2022 ))	/ count )
	=	15776	/	( (106668	+	107095)	/ 2 )
	=	15776	/	106881.5
	=	14.76 %

In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data, the Net Income data used here is four times the quarterly (Jun. 2022) net income data. ROA % is displayed in the 30-year financial page.

Merck (NYSE:MRK) ROA % Explanation

ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.

Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:

	ROA %		(Q: Jun. 2022 )
=	Net Income	/	Total Assets
=	15776	/	106881.5
=	(Net Income / Revenue)	*	(Revenue / Total Assets)
=	(15776 / 58372)	*	(58372 / 106881.5)
=	Net Margin %	*	Asset Turnover
=	27.03 %	*	0.5461
=	14.76 %

Note: The Net Income data used here is four times the quarterly (Jun. 2022) net income data. The Revenue data used here is four times the quarterly (Jun. 2022) revenue data.

Be Aware

Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).

Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.

E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.

Merck ROA % Related Terms

Thank you for viewing the detailed overview of Merck's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.

Merck Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Merck & Co Inc (NYSE:MRK) » Definitions » ROA %

Comparable Companies

NYSE:ABBV NYSE:PFE NYSE:BMY NYSE:LLY NAS:AMGN NAS:GILD NAS:BIIB NAS:HZNP NYSE:OGN NAS:CRXT NYSE:JNJ XSWX:ROG LSE:AZN XSWX:NOVN XPAR:SAN LSE:GSK XTER:BAYN TSE:4568 TSE:4519 SHSE:600276

Traded in Other Exchanges

MRK:Peru MRK:Mexico 0QAH:UK MRK:France 6MK:Germany 6MK:Germany 6MK:Germany 6MK:Germany MRK:Chile MRK:Switzerland MRCK34:Brazil MRK:Austria MRK:Argentina

Address

2000 Galloping Hill Road, Kenilworth, NJ, USA, 07033

Website

https://www.merck.com

Merck makes pharmaceutical products to treat several conditions in a number of therapeutic areas, including cardiometabolic disease, cancer, and infections. Within cancer, the firm's immuno-oncology platform is growing as a major contributor to overall sales. The company also has a substantial vaccine business, with treatments to prevent hepatitis B and pediatric diseases as well as HPV and shingles. Additionally, Merck sells animal health-related drugs. From a geographical perspective, close to half of the firm's sales are generated in the United States.

Executives

Baker Douglas M Jr	director	370 WBASHA ST NORTH ST PAUL MN 55102
Oosthuizen Johannes Jacobus	officer: SVP, U.S. Market	2000 GALLOPING HILL RD KENILWORTH NJ 07033
Garay Arpa	officer: SVP Human Health Global Mktg.	2000 GALLOPING HILL RD KENILWORTH NJ 07033
Downing Cristal N	officer: Chief Comm. & Public Afrs Ofcr	2000 GALLOPING HILL RD KENILWORTH NJ 07033
Klobuchar Michael A	officer: EVP - Chief Strategy Officer	2000 GALLOPING HILL RD KENILWORTH NJ 07033
Lecointe-cephas Lisa	officer: SVP Chief Ethics & Com Officer	2000 GALLOPING HILL RD KENILWORTH NJ 07033
Litchfield Caroline	officer: EVP & CFO	2000 GALLOPING HILL RD KENILWORTH NJ 07033
Mayo Stephen	director	2000 GALLOPING HILL RD KENILWORTH NJ 07033
Li Dean Y	officer: Executive VP & President, MRL	2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Williams David Michael	officer: EVP,Chief Info&Digital Officer	MERCK & CO., INC. 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Lavizzo-mourey Risa J	director	GENERAL ELECTRIC COMPANY 5 NECCO STREET BOSTON MA 02210
Seidman Christine E	director	MERCK & CO., INC. 2000 GALLOPING HILL ROAD KENILWORTH NJ 07033
Warden Kathy J	director	2980 FAIRVIEW PARK DRIVE FALLS CHURCH VA 22042
Craig Pamela	director	C/O ACCENTURE 161 N CLARK STREET CHICAGO IL 60601
Brun Leslie A	director	435 DEVON PARK DRIVE 700 BUILDING WAYNE PA 19087