AbbVie Inc (ABBV)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 40.65 | 13.00 | 8.04 | 9.51 | 11.51 |
AbbVie Inc's solvency ratios indicate a strong financial position with consistently low levels of debt relative to its assets, capital, and equity through the years 2020 to 2024. The Debt-to-assets ratio remained at 0.00 for all years, implying that the company's total debt is negligible compared to its total assets. The Debt-to-capital ratio also stayed at 0.00, reflecting that AbbVie's debt obligations do not form a significant portion of its total capital structure.
Similarly, the Debt-to-equity ratio maintained a steady level of 0.00, showcasing that AbbVie has almost no debt in relation to its shareholder's equity. This indicates that the company has relied more on equity financing than debt to fund its operations and expansion.
The fluctuation in the Financial leverage ratio over the years may raise some concerns as it increased from 11.51 in 2020 to 40.65 in 2024. A higher financial leverage ratio suggests that the company is utilizing more debt to finance its operations, which could potentially increase financial risk. However, it's important to note that the absolute level of the ratio remains relatively low, indicating that debt levels are still manageable for AbbVie.
Overall, the consistently low debt levels in relation to assets, capital, and equity portray AbbVie Inc as a financially stable and solvent company with a conservative approach towards debt management.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 2.32 | 3.87 | 10.29 | 8.15 | 5.98 |
Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a healthier financial position in terms of servicing debt obligations.
Based on the provided data for AbbVie Inc, the interest coverage ratio has shown fluctuation over the years as follows:
- As of December 31, 2020, the interest coverage ratio was 5.98, indicating that the company generated almost 6 times the operating income to cover its interest expenses.
- By December 31, 2021, the ratio improved to 8.15, reflecting a stronger ability to cover interest costs.
- The trend continued positively, with an interest coverage ratio of 10.29 as of December 31, 2022, implying an even better capacity to service debt obligations.
- However, by December 31, 2023, the interest coverage ratio decreased to 3.87, suggesting a lower ability to cover interest expenses compared to the previous year.
- The ratio further declined to 2.32 as of December 31, 2024, indicating a significant drop in the company's ability to meet interest payments out of its operating income.
Overall, the fluctuation in AbbVie Inc's interest coverage ratio over the years highlights the importance of monitoring the company's ability to service its debt obligations and the impact of operating performance on financial leverage.