The following answers will be based on Merck & Co Inc Annual Report 2020
- Define the company Operations
- What is the company Strategy
- Provide an industry assessment for your company
- Describe three items on the company balance sheet and provide an explanation of why the company records these on the statements
- Look at the company cash flow statement
- Copy the statement into you document as an image and describe what happened during the year
- Provide some explanations of the activity over the year
- Perform a financial ratio assessment of the company and provide explanations and thoughts on the ratios. [All work must be clearly cited (APA format preferred)]
All work must be clearly cited (APA format preferred).
Consolidated Balance Sheet Merck & Co., Inc. and Subsidiaries December 31 5 in millions excepi per share amounts) 2020 2019 8,062 $ $ 9,676 774 7.851 6,77% Assets Current Assets Cash and cash equivalents Short-term investments Accounts receivable (net of allowance for doubtful accounts of $85 in 2020 and 586 in 2019) Inventories (excludes inventories of S2,197 in 2020 and $1,480 in 2019 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 fumishings Construction in proetess 6310 5.541 27,764 788 5.978 4,277 27.483 1,469 350 12.648 16,649 7324 36,968 18.982 17.986 20.238 14,604 10.211 91.38 340 11989 IS 34 5013 32.739 17.686 15.053 19,425 Less accumulated depreciation Goodwill Other Intangibles, Nel Other Assets 6771 $4.397 S Lisbilities and Equity Current Liabilities Loans payable and current portion of long-term det Trade scounts payable Accrued and other current liabilities Income taxes payable Dividend payable Total current liabilities Long-Term Deb Deferred Income Tanes Other Noncurrent liabilities Merck & Co, In Stockholders' Equity Common stock, SO SO par value Authorized -6,500,000,000 shares Issued - 3,577,103,522 shares in 2020 and 2019 Other puid-in capital Retained cumings Accumulated other comprehensive loss 6,431 S 4594 13.053 1375 1,674 27.327 25.360 101S 12,482 3,810 1738 12.549 736 ES 33320 22.7.30 1.470 11.970 1,78 39.58 47.62 (6.034) 82.104 1.788 19.00 16,602 (61931 81,87 Less treasury stock, at cost 1,046,877,695 shares in 2020 and 1.038,087.496 shares in 2019 Total Merck & Co., Inc, stockholders equity Noncontrolling Interest Total equity 56,787 $5.950 2017 X 25,907 87 25,404 26.01 1. The coming of an integrular this concedirancale able of Contents Consolidated Statement of Equity Merck & Co., Inc. and Subsidiaries Years Ended December 31 ($ in millions except per share amounts) Common Stock $1.788 Other Paldin Capital 39,902 Tata S Retained Earnings S s 41,350 $ 6,220 322 Accumulated Other Non- Comprehensive Treasury controlling Low Stock Interests (4.910) 5 (43.794) S 233 - (274) (361) 34.569 6.220 (5,313) (361) ) (5,313) 19,091) (1,000) ( (8,091) (27) (25) (94) ) 38,808 1.788 956 (50,929) () (25) 862 26,880 9,80 (5.545) 42,579 9,843 181 (648) Balance January 1, 2018 Net income attributable to Merck & Co., Inc. Adoption of new accounting standards Other comprehensive loss, net of taxes Cash dividends declared on common stock (S1.99 per share) Treasury stock shares purchased Net loss attributable to noncontrolling interests Distributions attributable to noncontrolling interests Share-based compensation plans and other Balance December 31, 2018 Net income attributable to Merck & Co., Inc. Other comprehensive loss, net of taxes Cash dividends declared on common stock (52.26 per share) Treasury stock shares purchased Net loss attributable to noncontrolling interests Distributions attributable to noncontrolling interests Share-based compensation plans and other Balance December 31, 2019 Net income attributable to Merck & Co., Inc. Other comprehensive loss, net of taxes Cash dividends declared on common stock (52.48 per share) Treasury stock shares purchased Net income attributable to noncontrolling interests Distributions attributable to moncontrolling interests Share-based compensation plans and other Balance December 31, 2020 (5,820) 1,000 (5,780) (66) (21) (5,820) (4.780) (66) 21) 611 (148) 39,660 759 (55.950) 1788 (6,193) 94 46,602 7,067 20001 7.067 (441) (441) (6,307) (1.281) IS (1.281) 15 (22) 372 25.04 (22) 39.58 444 (56,787) S 1.788 S S 47.362 s (6.034) $ 87 5 The accompanying notes are an integral part of this consolidated financial statement Consolidated Statement of Cash Flows Merck & Co., Inc. and Subsidiaries Year Ended December 31 (5 in millions) 2020 2019 2018 7.0? 9. 777 $ 193 1.973 1.899 1,726 1,718 2.660 3.103 1,416 396 1,040 993 (668) 475 (556) 417 184 ASD (509) 348 978 (1,002) (855) 724 (1.13) 560 (453) (3.426) 10,253 294 (508) 399 376 (2,159) (237) (32) 13.440 (418) (911) 230 (341) 827 (206) (674) 10 922 Chh Plows from Operating Activities Netinere s Adjustments to reconcile net income to net cash provided by operating activities Ansortiration Depreciation Intangible asset impairment charges Charge for the acquisition of Velos Bio Inc. Charge for the acquisition of Peloton Therapeuties, Inc Charge for future payments related to collaboration license option Deferred income taxes Slure-based compensation Other Net changes in assets and liabilities Accounts receivable Inventories Trade accounts payable Accrued and other current liabilities Income taxes payable Noncurrent liabilities Other Ne Cash Provided by Operating Activities Cash Flows from Investing Activities Capital expenditures Purchase of Seagen Inc. common stock Purchases of securities and other investments Proceeds from sales of securities and other investments Acquisition of Velos Bio Inc., net of cash acquired Acquisition of ArQule, Ine, het of cash acquired Acquisition of Antelli Corporation, net af cash acquired Acquisition of Peloton Therapeutics, Inc., net of cash acquired Other acquisitions, net of cash acquired Other Net Cash sain Provided by Investing Activities Cash Flows from Financing Activities Na change in short-term borrowings Payments on debt Proceeds from issuance of debt Parluses of treasury stack Dividends paid to stockholders Proceeds from exercise of stock options Other Net Cash Used in Financing Activities Effect of change Rate Changclon Cash Cuth Equivalents and Restricted Cash Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash Cach Cash liquivalents and Restricted Cash at Reginning of Year (includes $258 of restricted cash at January 1, 2020 included in Other Anche Note 6) Cash Cash Equivalents and Restricted Cash at End of Year (includes $103 of restricted cash at December 31, 2020 included in Other Annessee Note 6) 5 (3.473) (2,615) (4684) (1,000) (95) 2.N12 (2.696) (2.545) (3,202) 8.622 (7.994) 15,252 (1,365) 130 (9.443) 03.620) (1.040) (294) 378 (431) 102 4.314 2.629) (3.710) 2.549 (1,957) 4.419 (1.281) (6215) 89 (436) (2.832) 253 (1,769) ( 4,958 (4,780) (5.695) 361 S (8,861) 17 1,967 5,124 (4.287) --- 19,091) (5,172) 591 (325) (13,160) (205) 1,871 9,934 7967 6.096 8,165 5 9,934 S 7.967 81 / 226 - 100% + A Financial statements, and the report dated February 25, 2021 of PricewaterhouseCoopers LLP, independent registered public accounting firm, are as follows: Consolidated Statement of Income Merck & Co., Inc. and Subsidiaries Years Ended December 31 (S in millions except per share amounts) 2020 2019 2018 Sales S 47.994 $ 46,840 $ 42,294 Costs, Expenses and Other Cost of sales 15,485 14,112 13,509 Selling, general and administrative 10,468 10,615 10.102 Research and development 13,558 9,872 9,752 Restructuring costs 578 638 632 Other (income) expense, net (886) 139 (402) 39,203 35 376 33,593 Income Before Taxes 8,791 11,464 8,701 Taxes on Income 1,709 1.687 2.508 Net Income 7,082 9.777 6,193 Less: Net Income (Loss) Attributable to Noncontrolling Interests 15 (66) (27) Net Income Attributable to Merck & Co., Inc. S 7,067 S 9.843 S 6,220 Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders S 2.79 $ 3.84 5 2.34 Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders S 2.78 5 3.81 S 2.32 Consolidated Statement of Comprehensive Income Merck & Co., Inc. and Subsidiaries Years Ended December 31 (5 in millions) 2020 7,067 $ 2019 9,843 S 2018 6,220 S Net Income Attributable to Merck & Co., Inc Other Comprehensive Loss Net of Taxes Net unrealized (loss) gain on derivatives, net of reclassifications Net unrealized (loss) gain on investments, net of reclassifications Benefit plan net (loss) gain and prior service (cost) credit, net of amortization Cumulative translation adjustment (297) (18) (279) 153 (135) 96 (705) 96 (648) 9,195 297 (10) (425) (223) (361 5.859 s 6,626 S $ 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 excepi per share amounts) 2020 2019 8,062 $ $ 9,676 774 7.851 6,77% Assets Current Assets Cash and cash equivalents Short-term investments Accounts receivable (net of allowance for doubtful accounts of $85 in 2020 and 586 in 2019) Inventories (excludes inventories of S2,197 in 2020 and $1,480 in 2019 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 fumishings Construction in proetess 6310 5.541 27,764 788 5.978 4,277 27.483 1,469 350 12.648 16,649 7324 36,968 18.982 17.986 20.238 14,604 10.211 91.38 340 11989 IS 34 5013 32.739 17.686 15.053 19,425 Less accumulated depreciation Goodwill Other Intangibles, Nel Other Assets 6771 $4.397 S Lisbilities and Equity Current Liabilities Loans payable and current portion of long-term det Trade scounts payable Accrued and other current liabilities Income taxes payable Dividend payable Total current liabilities Long-Term Deb Deferred Income Tanes Other Noncurrent liabilities Merck & Co, In Stockholders' Equity Common stock, SO SO par value Authorized -6,500,000,000 shares Issued - 3,577,103,522 shares in 2020 and 2019 Other puid-in capital Retained cumings Accumulated other comprehensive loss 6,431 S 4594 13.053 1375 1,674 27.327 25.360 101S 12,482 3,810 1738 12.549 736 ES 33320 22.7.30 1.470 11.970 1,78 39.58 47.62 (6.034) 82.104 1.788 19.00 16,602 (61931 81,87 Less treasury stock, at cost 1,046,877,695 shares in 2020 and 1.038,087.496 shares in 2019 Total Merck & Co., Inc, stockholders equity Noncontrolling Interest Total equity 56,787 $5.950 2017 X 25,907 87 25,404 26.01 1. The coming of an integrular this concedirancale able of Contents Consolidated Statement of Equity Merck & Co., Inc. and Subsidiaries Years Ended December 31 ($ in millions except per share amounts) Common Stock $1.788 Other Paldin Capital 39,902 Tata S Retained Earnings S s 41,350 $ 6,220 322 Accumulated Other Non- Comprehensive Treasury controlling Low Stock Interests (4.910) 5 (43.794) S 233 - (274) (361) 34.569 6.220 (5,313) (361) ) (5,313) 19,091) (1,000) ( (8,091) (27) (25) (94) ) 38,808 1.788 956 (50,929) () (25) 862 26,880 9,80 (5.545) 42,579 9,843 181 (648) Balance January 1, 2018 Net income attributable to Merck & Co., Inc. Adoption of new accounting standards Other comprehensive loss, net of taxes Cash dividends declared on common stock (S1.99 per share) Treasury stock shares purchased Net loss attributable to noncontrolling interests Distributions attributable to noncontrolling interests Share-based compensation plans and other Balance December 31, 2018 Net income attributable to Merck & Co., Inc. Other comprehensive loss, net of taxes Cash dividends declared on common stock (52.26 per share) Treasury stock shares purchased Net loss attributable to noncontrolling interests Distributions attributable to noncontrolling interests Share-based compensation plans and other Balance December 31, 2019 Net income attributable to Merck & Co., Inc. Other comprehensive loss, net of taxes Cash dividends declared on common stock (52.48 per share) Treasury stock shares purchased Net income attributable to noncontrolling interests Distributions attributable to moncontrolling interests Share-based compensation plans and other Balance December 31, 2020 (5,820) 1,000 (5,780) (66) (21) (5,820) (4.780) (66) 21) 611 (148) 39,660 759 (55.950) 1788 (6,193) 94 46,602 7,067 20001 7.067 (441) (441) (6,307) (1.281) IS (1.281) 15 (22) 372 25.04 (22) 39.58 444 (56,787) S 1.788 S S 47.362 s (6.034) $ 87 5 The accompanying notes are an integral part of this consolidated financial statement Consolidated Statement of Cash Flows Merck & Co., Inc. and Subsidiaries Year Ended December 31 (5 in millions) 2020 2019 2018 7.0? 9. 777 $ 193 1.973 1.899 1,726 1,718 2.660 3.103 1,416 396 1,040 993 (668) 475 (556) 417 184 ASD (509) 348 978 (1,002) (855) 724 (1.13) 560 (453) (3.426) 10,253 294 (508) 399 376 (2,159) (237) (32) 13.440 (418) (911) 230 (341) 827 (206) (674) 10 922 Chh Plows from Operating Activities Netinere s Adjustments to reconcile net income to net cash provided by operating activities Ansortiration Depreciation Intangible asset impairment charges Charge for the acquisition of Velos Bio Inc. Charge for the acquisition of Peloton Therapeuties, Inc Charge for future payments related to collaboration license option Deferred income taxes Slure-based compensation Other Net changes in assets and liabilities Accounts receivable Inventories Trade accounts payable Accrued and other current liabilities Income taxes payable Noncurrent liabilities Other Ne Cash Provided by Operating Activities Cash Flows from Investing Activities Capital expenditures Purchase of Seagen Inc. common stock Purchases of securities and other investments Proceeds from sales of securities and other investments Acquisition of Velos Bio Inc., net of cash acquired Acquisition of ArQule, Ine, het of cash acquired Acquisition of Antelli Corporation, net af cash acquired Acquisition of Peloton Therapeutics, Inc., net of cash acquired Other acquisitions, net of cash acquired Other Net Cash sain Provided by Investing Activities Cash Flows from Financing Activities Na change in short-term borrowings Payments on debt Proceeds from issuance of debt Parluses of treasury stack Dividends paid to stockholders Proceeds from exercise of stock options Other Net Cash Used in Financing Activities Effect of change Rate Changclon Cash Cuth Equivalents and Restricted Cash Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash Cach Cash liquivalents and Restricted Cash at Reginning of Year (includes $258 of restricted cash at January 1, 2020 included in Other Anche Note 6) Cash Cash Equivalents and Restricted Cash at End of Year (includes $103 of restricted cash at December 31, 2020 included in Other Annessee Note 6) 5 (3.473) (2,615) (4684) (1,000) (95) 2.N12 (2.696) (2.545) (3,202) 8.622 (7.994) 15,252 (1,365) 130 (9.443) 03.620) (1.040) (294) 378 (431) 102 4.314 2.629) (3.710) 2.549 (1,957) 4.419 (1.281) (6215) 89 (436) (2.832) 253 (1,769) ( 4,958 (4,780) (5.695) 361 S (8,861) 17 1,967 5,124 (4.287) --- 19,091) (5,172) 591 (325) (13,160) (205) 1,871 9,934 7967 6.096 8,165 5 9,934 S 7.967 81 / 226 - 100% + A Financial statements, and the report dated February 25, 2021 of PricewaterhouseCoopers LLP, independent registered public accounting firm, are as follows: Consolidated Statement of Income Merck & Co., Inc. and Subsidiaries Years Ended December 31 (S in millions except per share amounts) 2020 2019 2018 Sales S 47.994 $ 46,840 $ 42,294 Costs, Expenses and Other Cost of sales 15,485 14,112 13,509 Selling, general and administrative 10,468 10,615 10.102 Research and development 13,558 9,872 9,752 Restructuring costs 578 638 632 Other (income) expense, net (886) 139 (402) 39,203 35 376 33,593 Income Before Taxes 8,791 11,464 8,701 Taxes on Income 1,709 1.687 2.508 Net Income 7,082 9.777 6,193 Less: Net Income (Loss) Attributable to Noncontrolling Interests 15 (66) (27) Net Income Attributable to Merck & Co., Inc. S 7,067 S 9.843 S 6,220 Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders S 2.79 $ 3.84 5 2.34 Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders S 2.78 5 3.81 S 2.32 Consolidated Statement of Comprehensive Income Merck & Co., Inc. and Subsidiaries Years Ended December 31 (5 in millions) 2020 7,067 $ 2019 9,843 S 2018 6,220 S Net Income Attributable to Merck & Co., Inc Other Comprehensive Loss Net of Taxes Net unrealized (loss) gain on derivatives, net of reclassifications Net unrealized (loss) gain on investments, net of reclassifications Benefit plan net (loss) gain and prior service (cost) credit, net of amortization Cumulative translation adjustment (297) (18) (279) 153 (135) 96 (705) 96 (648) 9,195 297 (10) (425) (223) (361 5.859 s 6,626 S $ Comprehensive Income Attributable to Merck & Co., Inc. The accompanying notes are an integral part of these consolidated financial statements
