AbbVie Inc (ABBV)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	12,814,000	9,201,000	9,746,000	8,449,000	39,924,000
Short-term investments	US$ in thousands	2,000	28,000	84,000	30,000	0
Total current liabilities	US$ in thousands	37,841,000	29,538,000	35,194,000	28,661,000	15,585,000
Cash ratio		0.34	0.31	0.28	0.30	2.56

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($12,814,000K + $2,000K) ÷ $37,841,000K
= 0.34

The cash ratio of Abbvie Inc has shown a relatively stable trend over the past five years, with values ranging from 0.42 to 0.47. The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents.

The consistent range of the cash ratio indicates that Abbvie Inc has maintained a prudent level of liquidity to meet its short-term obligations. A cash ratio above 1.0 suggests that a company can cover all its current liabilities with its cash on hand, while a ratio below 1.0 may indicate potential liquidity challenges.

Although the cash ratio of Abbvie Inc has been consistently below 1.0 in the last five years, it is important to consider the industry norms and the company's specific business model when evaluating the adequacy of its liquidity position. Overall, the stable cash ratio of Abbvie Inc suggests a cautious approach towards managing its short-term liquidity needs.