Answer the following questions based on the financial statements of Merck

Ratios, Profit, and Sales Analysis

1a: What was ROE and ROA in fiscal 2021? Go back 3 years and breakdown ROE and ROA into their components

1b: Perform a full common size income statement analysis.

1c: Compare the 2021 common size statement of Merck and Pfizer. What are the differences and similarities?

1d: What was the profit margin for the first 6 months of 2022? Comment on this performance? Explain

1e: For the first 6 months of 2022 which of the two main segments performed best? Answer with empirical evidence from the 10q.

Accruals and Cash Flows

2a. What were total accruals in 2021, 2020 and 2019? Is this a problem in either year?

2b. What was CFO in 2021, 2020 and 2019? What did Merck do with this cash in each of these years? Do you believe they used the cash wisely? Explain

Discontinued Operations

3a. What was the percentage change in sales from 2020 to 2021 and from 2019 to 2020 for?

Sales as reported on the income statement

Total company sales, including discontinued operations

3b. What were total revenues, total expenses, and net income of the discontinued operations in 2021, 2020, and 2019? Did they get rid of profitable divisions?

Restructuring costs (note 6, page 101)

4a: Make all 2021 journal entries associated with the restructuring. What was the effect of this entry on total assets, liabilities, equity, revenues, expenses, and net income? Give both direction and amount

4b. Was either the 2021 or 2020 restructuring significant in size?

Stock prices

5a: For both Merck and Pfizer, what was the stock market return, net of the S&P 500 for calendar 2020, 2021, and 2022 through 9/20/2022, net of the S&P? Do these returns match the accounting numbers?

5b: What is the market-to-sales ratio for each firm as of 12/31/2021? As of 9/20/2022?

Pensions (US plans only, note 14, page 124)

6a: What was the balance sheet liability for defined benefit pensions in 2021, 2020 and 2019?

6b: What was the expense or revenue for US defined benefit pensions in 2021, 2020, and 2019?

6c: What was FMV as a percent of the PBO for defined pensions at the end of 2021? What was FMV as a percent of the APBO for postretirement benefits at the end of 2021? Why is the APBO percentage so much higher than we saw for Clorox?

Bonus: Was either Merck or Pfizer in an Amazon situation in either 2021, 2020, or 2019? How do you know?