Abbott Laboratories (ABT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.02 | 2.74 | 3.10 | 3.59 | 2.99 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 4.42 | 4.54 | 4.48 | 3.87 | 4.06 |
Abbott Laboratories' inventory turnover ratio has shown a fluctuating trend over the past five years, ranging from 2.74 to 3.59. This indicates the number of times Abbott's inventory was sold and replaced during the year. The increasing trend from 2020 to 2021 and then slightly declining in 2023 suggests improvements in inventory management efficiency followed by a slight slowdown. However, the ratio is generally within a reasonable range, indicating effective inventory control.
The receivables turnover ratio data is missing for all years, making it challenging to assess how efficiently Abbott is collecting on credit sales. Without this information, it's difficult to evaluate the effectiveness of the company's credit policies and the efficiency of its accounts receivable management.
Similarly, payables turnover data is not provided, so insights into how quickly Abbott pays its suppliers are missing. This ratio would have helped in understanding the company's payment practices and relationships with suppliers.
The working capital turnover ratio for Abbott Laboratories has remained relatively stable around 4 over the five-year period. This ratio indicates how efficiently the company is using its working capital to generate revenue. A consistent ratio suggests that Abbott is effectively utilizing its current assets to support its operations and generate sales.
In conclusion, Abbott Laboratories has shown good inventory turnover and working capital turnover ratios, indicating efficient management of inventory and working capital. However, the absence of receivables and payables turnover ratios limits a comprehensive assessment of the company's overall working capital and operations efficiency.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 120.86 | 133.41 | 117.71 | 101.54 | 121.93 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data, Abbott Laboratories' activity ratios can be analyzed as follows:
1. Days of Inventory on Hand (DOH):
- December 31, 2020: 121.93 days
- December 31, 2021: 101.54 days
- December 31, 2022: 117.71 days
- December 31, 2023: 133.41 days
- December 31, 2024: 120.86 days
The trend in Abbott Laboratories' Days of Inventory on Hand (DOH) indicates fluctuations over the years. The company's inventory turnover seems to have improved from 2021 to 2022, dipped in 2023, and then slightly recovered in 2024. Lower DOH values are generally favorable as they signify a shorter time taken to sell inventory.
2. Days of Sales Outstanding (DSO):
- December 31, 2020: Not provided
- December 31, 2021: Not provided
- December 31, 2022: Not provided
- December 31, 2023: Not provided
- December 31, 2024: Not provided
Unfortunately, specific data for Abbott Laboratories' Days of Sales Outstanding (DSO) is not available. DSO helps measure the average number of days it takes to collect revenue after a sale is made, and a lower DSO indicates a faster collection of accounts receivable.
3. Number of Days of Payables:
- December 31, 2020: Not provided
- December 31, 2021: Not provided
- December 31, 2022: Not provided
- December 31, 2023: Not provided
- December 31, 2024: Not provided
Similar to DSO, information regarding Abbott Laboratories' Number of Days of Payables is not available. A longer period of payables indicates that the company is taking more time to pay its suppliers, which can be advantageous for managing cash flows.
Overall, Abbott Laboratories' inventory turnover seems to have experienced fluctuations in recent years, indicating varying efficiency in managing inventory levels. More detailed information on DSO and payables turnover would provide a comprehensive view of the company's overall liquidity and operational efficiency.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 4.76 | 4.81 | 3.83 |
| Total asset turnover | 0.52 | 0.55 | 0.59 | 0.57 | 0.48 |
Long-term activity ratios provide insights into how effectively Abbott Laboratories is utilizing its assets to generate sales over an extended period.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures the efficiency of using fixed assets to generate revenue.
- The trend for Abbott Laboratories shows an improvement from 3.83 in 2020 to 4.81 in 2021, indicating that the company is generating more revenue for each dollar invested in fixed assets.
- The metric slightly decreased to 4.76 in 2022, but the overall trend suggests efficient utilization of fixed assets.
- Data for 2023 and 2024 is not available, so it is essential to monitor further trends for a complete assessment of fixed asset turnover.
2. Total Asset Turnover:
- The total asset turnover ratio measures how effectively Abbott Laboratories utilizes all its assets to generate sales.
- The trend showcases an increase in efficiency, with the ratio moving from 0.48 in 2020 to 0.57 in 2021 and further to 0.59 in 2022, indicating that the company is generating more sales relative to its total assets.
- However, the ratio slightly decreased to 0.55 in 2023 and 0.52 in 2024, suggesting a possible decline in asset turnover efficiency.
- It is essential for Abbott Laboratories to analyze the reasons behind the decrease in total asset turnover in 2023 and 2024 to maintain optimal asset utilization in the future.
Overall, the analysis of long-term activity ratios for Abbott Laboratories indicates that the company has shown improvements in efficiently generating revenue from fixed assets but might need to address potential declines in total asset turnover to sustain long-term operational efficiency.