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Merck Piotroski F-Score

: 8 (As of Today)
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Good Sign:

Piotroski F-Score is 8, indicates a very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Merck has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

The historical rank and industry rank for Merck's Piotroski F-Score or its related term are showing as below:

MRK' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Med: 6   Max: 9
Current: 8

During the past 13 years, the highest Piotroski F-Score of Merck was 9. The lowest was 2. And the median was 6.


Merck Piotroski F-Score Historical Data

The historical data trend for Merck's Piotroski F-Score 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
Piotroski F-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 7.00 7.00 5.00 8.00

Merck Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.00 7.00 8.00 8.00 8.00

Competitive Comparison

For the Drug Manufacturers - General subindustry, Merck's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score 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.

   

Merck Piotroski F-Score Distribution

For the Drug Manufacturers industry and Healthcare sector, Merck's Piotroski F-Score distribution charts can be found below:

* The bar in red indicates where Merck's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* 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.

This Year (Jun22) TTM:Last Year (Jun21) TTM:
Net Income was 4567 + 3758 + 4310 + 3944 = $16,579 Mil.
Cash Flow from Operations was 4797 + 5031 + 4761 + 4302 = $18,891 Mil.
Revenue was 13154 + 13521 + 15901 + 14593 = $57,169 Mil.
Gross Profit was 9704 + 9647 + 10521 + 10377 = $40,249 Mil.
Average Total Assets from the begining of this year (Jun21)
to the end of this year (Jun22) was
(90688 + 93494 + 105694 + 106668 + 107095) / 5 = $100727.8 Mil.
Total Assets at the begining of this year (Jun21) was $90,688 Mil.
Long-Term Debt & Capital Lease Obligation was $28,684 Mil.
Total Current Assets was $32,116 Mil.
Total Current Liabilities was $23,168 Mil.
Net Income was 2941 + -2094 + 3179 + 1545 = $5,571 Mil.

Revenue was 10929 + 10948 + 10627 + 11402 = $43,906 Mil.
Gross Profit was 7916 + 5919 + 7428 + 8298 = $29,561 Mil.
Average Total Assets from the begining of last year (Jun20)
to the end of last year (Jun21) was
(90615 + 89800 + 91588 + 90847 + 90688) / 5 = $90707.6 Mil.
Total Assets at the begining of last year (Jun20) was $90,615 Mil.
Long-Term Debt & Capital Lease Obligation was $24,033 Mil.
Total Current Assets was $28,665 Mil.
Total Current Liabilities was $21,906 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Merck's current Net Income (TTM) was 16,579. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Merck's current Cash Flow from Operations (TTM) was 18,891. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets (Jun21)
=16579/90688
=0.1828136

ROA (Last Year)=Net Income/Total Assets (Jun20)
=5571/90615
=0.06147989

Merck's return on assets of this year was 0.1828136. Merck's return on assets of last year was 0.06147989. ==> This year is higher. ==> Score 1.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Merck's current Net Income (TTM) was 16,579. Merck's current Cash Flow from Operations (TTM) was 18,891. ==> 18,891 > 16,579 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun22)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Jun21 to Jun22
=28684/100727.8
=0.28476746

Gearing (Last Year: Jun21)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Jun20 to Jun21
=24033/90707.6
=0.26495024

Merck's gearing of this year was 0.28476746. Merck's gearing of last year was 0.26495024. ==> Last year is lower than this year ==> Score 0.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Jun22)=Total Current Assets/Total Current Liabilities
=32116/23168
=1.38622238

Current Ratio (Last Year: Jun21)=Total Current Assets/Total Current Liabilities
=28665/21906
=1.3085456

Merck's current ratio of this year was 1.38622238. Merck's current ratio of last year was 1.3085456. ==> This year's current ratio is higher. ==> Score 1.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Merck's number of shares in issue this year was 2540. Merck's number of shares in issue last year was 2540. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=40249/57169
=0.7040354

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=29561/43906
=0.67327928

Merck's gross margin of this year was 0.7040354. Merck's gross margin of last year was 0.67327928. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Jun21)
=57169/90688
=0.63039211

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jun20)
=43906/90615
=0.48453347

Merck's asset turnover of this year was 0.63039211. Merck's asset turnover of last year was 0.48453347. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+0+1+1+1+1
=8

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Merck has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

Merck  (NYSE:MRK) Piotroski F-Score Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Merck Piotroski F-Score Related Terms

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


Merck Business Description

Merck logo
Address
2000 Galloping Hill Road, Kenilworth, NJ, USA, 07033
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

Merck Headlines

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