AbbVie Inc (ABBV)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 0.66 0.65 0.81 0.94 0.87 0.96 0.89 0.96 0.96 0.93 0.84 0.82 0.79 1.01 0.91 0.83 0.84 0.95 0.86 3.14
Quick ratio 0.14 0.17 0.31 0.44 0.34 0.38 0.27 0.24 0.31 0.36 0.29 0.23 0.28 0.43 0.30 0.31 0.30 0.33 0.25 2.50
Cash ratio 0.14 0.17 0.31 0.44 0.34 0.38 0.27 0.24 0.31 0.36 0.29 0.23 0.28 0.43 0.30 0.31 0.30 0.33 0.25 2.50

Based on the provided data, AbbVie Inc's liquidity ratios show fluctuations over the analyzed period.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. AbbVie's current ratio started relatively high at 3.14 on March 31, 2020, indicating a strong short-term liquidity position. However, the ratio fluctuated throughout the period, reaching a low of 0.65 on September 30, 2024. Overall, the current ratio has been declining, suggesting a potential decrease in the company's ability to meet its short-term obligations.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. AbbVie's quick ratio was at 2.50 on March 31, 2020, but then dropped significantly to 0.14 on December 31, 2024. This sharp decline indicates a reduction in the company's ability to cover its current liabilities with its most liquid assets.

3. Cash Ratio: The cash ratio focuses solely on a company's ability to cover its short-term liabilities with cash and cash equivalents. AbbVie's cash ratio mirrored the trend of the quick ratio, starting at 2.50 on March 31, 2020, and falling to 0.14 by December 31, 2024. This suggests a decreasing ability to pay off immediate obligations using cash resources only.

In conclusion, AbbVie Inc's liquidity position has shown a declining trend in the analyzed period. The company may need to assess its working capital management and ensure it maintains adequate liquidity to meet its short-term obligations.


See also:

AbbVie Inc Liquidity Ratios (Quarterly Data)


Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 102.65 126.34 101.76 90.12 87.51 76.96 84.97 80.65 75.02 65.92 73.21 73.55 65.44 63.41 66.91 67.63 78.52 99.77 154.66 87.56

The cash conversion cycle of AbbVie Inc, as depicted in the provided data, shows fluctuations over the analyzed period. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

During the period from March 31, 2020, to December 31, 2024, AbbVie Inc's cash conversion cycle ranged from a low of 63.41 days to a high of 154.66 days. A lower cash conversion cycle is generally desirable as it indicates that the company is efficiently managing its working capital.

The company's cash conversion cycle decreased from 87.56 days on March 31, 2020, to 102.65 days on December 31, 2024, with fluctuations in between. The cycle peaked at 154.66 days on June 30, 2020, showing a significant delay in converting investments into cash during that period.

Overall, it is essential for AbbVie Inc to focus on optimizing its cash conversion cycle to ensure efficient utilization of its working capital and improve its cash flow management. Monitoring and managing factors contributing to the cycle, such as inventory turnover, accounts receivable collection, and accounts payable management, can help in achieving a more favorable cash conversion cycle in the future.