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.