The following is based on information from the 1998 Annual Report of Merck & Co.,
Inc., as obtained from their web site at:
From their mission statement:
Merck & Co., Inc. is a leading research-driven pharmaceutical products and services
Merck discovers, develops, manufactures and markets a broad range of innovative
products to improve human and animal health, directly and through its joint ventures.”
In 1998, Merck introduced the following five new and important products for improving
the quality of life for millions worldwide:
Singulair for asthma
Maxalt for migraine headache
Aggrastat for acute coronary syndrome
Propecia for male pattern hair loss
Cosopt for glaucoma
In addition, key products (Zocor, Fosamax, Cozaar, Hyzaar, and Crixivan) grew steadily in sales.
In 1998, Merck had no new acquisitions, but conducted some restructuring with two of
their previous acquisitions:
Medco Containment Services, Inc. (Merck-Medco) and Astra AB
(Astra Merck Inc.).
Continued partnerships in 1998 included those with DuPont, Johnson &
Johnson and Rhone-Poulenc.
Concerns in 1998 included:
Expiration of patent protection for several key products.
Increasing competition and cost-containment pressures.
Health policy challenges.
Financial ratio analyses from data in the 1998 statements:
Current ratio =
current assets/current liabilities = 10,228.5/6,068.8 = 1.69
ood, but not highly favorable value.
Acid-ratio test = quick assets/current liabilities = (10.228.5 – 2,623.9)/6,068.8 = 1.25
A reasonable, but not highly favorable value.
Equity ratio = stockholders’ equity/total assets = 12,801.8/31,853.4 = 0.402
Return on total assets = pretax income/total assets = 8,133.1/31,853.4 = 0.255
25.5% is a very good return.