AbbVie Inc (ABBV)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.08 | 11.49 | 11.99 | 9.81 | 4.10 |
| Receivables turnover | 4.87 | 5.16 | 5.63 | 5.19 | 6.13 |
| Payables turnover | 12.31 | 14.02 | 13.01 | 14.27 | 5.12 |
| Working capital turnover | — | — | — | — | 0.98 |
AbbVie Inc's activity ratios reflect the efficiency with which the company is managing its operations.
1. Inventory Turnover: AbbVie's inventory turnover has been relatively stable over the past five years, ranging from 4.10 to 5.58. This indicates that AbbVie is effectively managing its inventory levels and converting its stock into sales. A higher turnover implies that the company is selling its inventory quickly, which can lead to lower carrying costs and potentially higher profitability.
2. Receivables Turnover: AbbVie's receivables turnover has shown some variability but generally remained between 4.87 and 6.13 over the five-year period. A higher receivables turnover ratio suggests that the company is efficient in collecting payments from customers and managing its accounts receivable effectively.
3. Payables Turnover: The payables turnover ratio for AbbVie has fluctuated between 5.12 and 6.76 over the past five years. A higher payables turnover ratio indicates that the company is able to pay off its suppliers quickly, which can be beneficial for maintaining good relationships with suppliers and potentially negotiating favorable payment terms.
4. Working Capital Turnover: The data provided does not include the working capital turnover ratio for AbbVie for the years under consideration. However, a working capital turnover ratio below 1 (as seen in 2019) could indicate that AbbVie is not efficiently utilizing its working capital to generate sales. This ratio measures how effectively the company is using its working capital to support its revenue-generating activities.
Overall, based on the activity ratios analyzed, AbbVie Inc appears to be efficiently managing its inventory, receivables, and payables to support its operational activities.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 32.94 | 31.76 | 30.45 | 37.19 | 88.96 |
| Days of sales outstanding (DSO) | days | 74.96 | 70.76 | 64.80 | 70.30 | 59.56 |
| Number of days of payables | days | 29.64 | 26.04 | 28.06 | 25.57 | 71.24 |
To analyze Abbvie Inc's activity ratios, we will focus on its Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- Abbvie's Days of Inventory on Hand has shown fluctuations over the past five years, ranging from 65.44 days in 2021 to 88.96 days in 2019. In 2023, the DOH decreased to 73.29 days. This indicates that Abbvie is carrying less inventory in 2023 compared to the previous year, which can be a positive sign of efficient inventory management.
2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding for Abbvie has also varied over the years, with values ranging from 59.56 days in 2019 to 74.96 days in 2023. The increase in DSO in 2023 suggests that Abbvie is taking longer to collect its receivables from customers, which may impact its cash flow and liquidity position.
3. Number of Days of Payables:
- Abbvie's Number of Days of Payables has been relatively stable, with a slight increase from 53.99 days in 2020 to 65.94 days in 2023. This indicates that Abbvie is taking longer to pay its suppliers, which could be a strategy to improve its working capital management.
Overall, Abbvie's activity ratios suggest that the company has been managing its inventory efficiently in 2023, although there are some areas such as DSO that may require attention to improve cash flow and liquidity. Monitoring these ratios over time can provide insights into Abbvie's operational efficiency and effectiveness in managing its working capital.
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Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.89 | 11.76 | 11.00 | 8.73 | 11.23 |
| Total asset turnover | 0.40 | 0.42 | 0.38 | 0.30 | 0.37 |
The fixed asset turnover ratio for Abbvie Inc has shown a fluctuating trend over the past five years, ranging from a high of 11.76 in 2022 to a low of 8.73 in 2020. This ratio indicates how efficiently the company is utilizing its fixed assets to generate revenue, with a higher ratio signifying better asset utilization. Despite the fluctuations, the company has generally maintained strong performance in efficiently generating revenue from its fixed assets.
On the other hand, the total asset turnover ratio has also varied over the same period, ranging from 0.30 in 2020 to 0.42 in 2022. This ratio reflects the company's ability to generate sales relative to its total assets. In this case, a higher total asset turnover ratio implies that Abbvie Inc is efficiently deploying its total assets to generate revenue.
Overall, the long-term activity ratios suggest that Abbvie Inc has demonstrated sound efficiency in utilizing both its fixed assets and total assets to generate revenue over the past five years, with occasional fluctuations but generally maintaining solid performance in asset utilization.