Engineering cost analysis

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1) (20 pts) Use the given information about Merck & Co. to compute for the period ending Dec. 31, 2019 the following ratios: a) Average Collection Period d) Return on Assets b) Asset Turnover e) Debt to Equity c) Current Ratio Item 8. Financial Statements and Supplementary Data. (a) Financial Statements The consolidated balance sheet of Merck & Co., Inc. and subsidiaries as of December 31, 2019 and 2018, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2019, the notes to consolidated financial statements, and the report dated February 26, 2020 of PricewaterhouseCoopers LLP, independent registered public accounting firm, are as follows: Consolidated Statement of Income Merck & Co., Inc. and Subsidiaries Years Ended December 31 (5 in millions except per share amounts) 2019 2018 2017 Sales S 46,840 $ 42,294 $ 40,122 Costs, Expenses and Other Cost of sales 14,112 13,509 12,912 Selling, general and administrative 10,615 10,102 10,074 Research and development 9,872 9,752 10,339 Restructuring costs 638 632 776 Other (income) expense, net 139 (402) (500) 35,376 33,593 33,601 Income Before Taxes 11,464 8,701 6,521 Taxes on Income 1,687 2,508 4,103 Net Income 9,777 6,193 2,418 Less: Net (Loss) Income Attributable to Noncontrolling Interests (66) (27) 24 Net Income Attributable to Merck & Co., Inc. $ 9,843 $ 6,220 $ 2,394 Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders $ 3.84 2.34 $ 0.88 Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders $ 3.81 $ 2.32 $ 0.87 Consolidated Statement of Comprehensive Income Merck & Co., Inc. and Subsidiaries Years Ended December 31 ($ in millions) 2019 2018 2017 S 9,843 S 6,220 $2,394 Net Income Attributable to Merck & Co., Inc. Other Comprehensive (Loss) Income Net of Taxes: Net unrealized (loss) gain on derivatives, net of reclassifications Net unrealized gain (loss) on investments, net of reclassifications Benefit plan net (loss) gain and prior service (cost) credit, net of amortization Cumulative translation adjustment (135) 297 (446) 96 (10) (58) (705) (425) 419 96 (223) 401 (648) (361) 316 $ 9,195 $ 5,859 $ 2,710 Comprehensive Income Attributable to Merck & Co., Inc. The accompanying notes are an integral part of these consolidated financial statements Consolidated Balance Sheet Merck & Co., Inc. and Subsidiaries December 31 (5 in millions except per share amounts) 2019 2018 $ 9,676 $ 7,965 774 899 6,778 7,071 Assets Current Assets Cash and cash equivalents Short-term investments Accounts receivable (net of allowance for doubtful accounts of 586 in 2019 and S119 in 2018) Inventories (excludes inventories of $1,480 in 2019 and $1,417 in 2018 classified in Other assets - see Note 7) Other current assets Total current assets Investments Property, Plant and Equipment (at cost) Land Buildings Machinery, equipment and office furnishings Construction in progress Less: accumulated depreciation Goodwill Other Intangibles, Net Other Assets 5,978 4,277 27.483 1,469 5,440 4.500 25.875 6,233 343 333 11,989 11,486 15,394 14,441 5,013 3,355 32,739 29,615 17,686 16,324 15,053 13.291 19.425 18.253 14,195 13.104 6,771 5,881 $ 84,397 S 82,637 Liabilities and Equity Current Liabilities Loans payable and current portion of long-term debt Trade accounts payable Accrued and other current liabilities Income taxes payable Dividends payable Total current liabilities Long-Term Debt Deferred Income Taxes Other Noncurrent Liabilities Merck & Co., Inc. Stockholders' Equity Common stock, $0.50 par value Authorized - 6,500,000,000 shares Issued - 3,577,103,522 shares in 2019 and 2018 Other paid-in capital Retained earnings Accumulated other comprehensive loss $ 3,610 S 5,308 3,738 3,318 12,549 10.15 736 1,971 1,587 1.458 22.220 22.206 22,736 19,806 1.470 1.702 11,970 12.041 1,788 39,660 46,602 (6,193) 81,857 1,788 38,808 42,579 (5.545 77,630 Less treasury stock, at cost: 1,038,087,496 shares in 2019 and 984,543,979 shares in 2018 Total Merck & Co., Inc. stockholders' equity Noncontrolling Interests Total equity 55,950 50,929 25.907 26,701 94 181 26.001 26,882 $ 84,397 S 82.637