AbbVie Inc (ABBV)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | 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 |
| Receivables | US$ in thousands | 11,155,000 | 11,254,000 | 9,977,000 | 8,822,000 | 5,428,000 |
| Total current liabilities | US$ in thousands | 37,841,000 | 29,538,000 | 35,194,000 | 28,661,000 | 15,585,000 |
| Quick ratio | 0.63 | 0.69 | 0.56 | 0.60 | 2.91 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($12,814,000K
+ $2,000K
+ $11,155,000K)
÷ $37,841,000K
= 0.63
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of less than 1 indicates that a company may have difficulty meeting its short-term liabilities.
Looking at Abbvie Inc's quick ratio over the past five years, we see a fluctuating trend:
- In 2023, the quick ratio was 0.76, which suggests that Abbvie may have some challenges in meeting its short-term obligations with its liquid assets.
- In 2022, the quick ratio improved to 0.84, indicating a slightly stronger position in terms of liquidity compared to the previous year.
- However, in 2021, the quick ratio decreased to 0.70, implying a decline in Abbvie's ability to cover its short-term liabilities with liquid assets.
- Similarly, in 2020, the quick ratio stood at 0.73, showing a slight improvement from the previous year but still below the ideal ratio of 1.
- Interestingly, in 2019, Abbvie had a significantly higher quick ratio of 3.06, which could be due to specific circumstances or one-time events skewing the liquidity position for that year.
Overall, the fluctuating trend in Abbvie's quick ratio over the years signals a need for the company to closely monitor and manage its liquidity position to ensure it can effectively meet its short-term obligations. Further analysis of the company's cash management practices and working capital efficiency may provide insights into improving the quick ratio and overall liquidity position.
Peer comparison
Dec 31, 2023