Question

Accessing SEC reports and Calculating Ratios
Access the 2016 financial reports at the SEC websites for Pfizer Inc. and Merck & Co., two close competitors in the pharmaceutical industry.
Pfizer's financial reports are available here: Pfizer 2016 financial reports
Merick's financial reports are available here: Merck 2016 financial reports
a. Use data from the companies' balance sheets and income statements to complete the following table.

$ millions	Pfizer	Merck
Total assets	Answer	Answer
Revenue	Answer	Answer
Net income	Answer	Answer

b. Compute the ROA and the components for profit margin and asset turnover for each company.

Round answers to two decimal places (example: 0.12345 = 12.35%).
To simplify computations, use year-end balance for total assets to compute ratios.

	Pfizer	Merck
Return on assets (ROA)	Answer	Answer
Profit margin (PM)	Answer	Answer
Asset turnover (AT)	Answer	Answer

Answer 1

$ millions	Pfizer	Merck
Total assets	171615	95377
Revenue	52824	39807
Net income	7246	3941
	Pfizer	Merck
Return on assets =	Net income/Total Assets
	4.22%	4.13%
Profit Margin =	(Net Income/Net Sales) * 100
=	13.72%	9.90%
Asset turnover =	Net sales/Total Assets
=	0.31	0.42