Forensic Analysis · Healthcare / Pharmaceuticals / Biotech · as of Aug 7, 2026
Merck & Co., Inc. (MRK)
A forensic read on Merck & Co., Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
C · Mixed — selective
Forensic grade
Safe
Financial health
7.5
Distress distance
Clean
Earnings quality
4
Forensic signals
99.4
P / E (ttm)
34.7%
ROE
$322.2B
Market cap
2.65%
Dividend yield
1.3%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Merck & Co., Inc. earns a C (Mixed — selective) forensic quality grade, and its balance-sheet distress test reads 7.5, placing it in the Safe zone. 4 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of noa).
What the filings flag
+21.7%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +21.7% relative to their own average in FY2025 — scaled by NOA itself, not total assets (see the Forensic Screens card's differently-scaled Sloan Accrual Ratio for that read). Accruals are building sharply — a large slice of profit sits in operating assets, not cash; Richardson/Sloan link high accruals to weaker future returns as they reverse. The build is led by receivables up +15% against revenue +1% and inventory up +9% against +8% in cost of sales. The cash-flow cross-check is more mixed: reported earnings ran in line with operating cash by 2% of net operating assets, diverging from the balance-sheet accrual read.
-0.5%/yr
FY2022–FY2025
Share count.Diluted share count changed -1% over the last 3 years to FY2025 (-0.5%/yr). Roughly flat — buybacks ($5.1B) are about offsetting stock comp ($820M), not shrinking the count. Per-share value isn't being meaningfully helped or hurt by the count.
107% of FCF
FY2025
Shareholder returns.Returned $13.3B to shareholders (buybacks + dividends) in FY2025 — 107% of free cash flow. Right at the limit of what free cash flow covers — little room before it's funded by debt or the balance sheet. That ratio has been CLIMBING toward the limit — 48% of free cash flow a few years back — not just sitting there. Counting the $820M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 114%.
$162M
FY2019–FY2019
Goodwill impairments.Took $162M of goodwill writedowns across 1 year (FY2019 ($162M)) — about 2% of net income over the span. Writedowns mean past acquisitions underperformed what was paid for them.
Key fundamentals
Latest Revenue$65.01B
Revenue Growth YoY+1.3%
Revenue CAGR (3yr)+3.1%
Net Margin28.1%
Free Cash Flow$12.36B
Return on Equity34.7%
Debt / Equity0.94x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Merck & Co., Inc.'s actual 10-K/10-Q/8-K filings?