Abbott Laboratories (ABT)

Working capital turnover

		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
Revenue (ttm)	US$ in thousands	41,950,000	41,217,000	40,725,000	40,326,000	40,109,000	39,959,000	40,226,000	41,505,000	43,653,000	45,030,000	45,548,000	44,514,000	43,075,000	42,308,000	40,233,000	37,338,000	34,608,000	32,221,000	31,444,000	32,095,000
Total current assets	US$ in thousands	23,656,000	23,802,000	23,119,000	22,376,000	22,670,000	22,664,000	23,505,000	25,224,000	25,224,000	24,845,000	24,956,000	23,429,000	24,239,000	23,492,000	22,627,000	21,817,000	20,441,000	17,390,000	17,221,000	15,498,000
Total current liabilities	US$ in thousands	14,157,000	14,902,000	13,760,000	14,021,000	13,841,000	13,042,000	14,350,000	15,489,000	15,489,000	13,365,000	12,392,000	12,647,000	13,105,000	12,867,000	12,614,000	12,462,000	11,907,000	10,257,000	10,959,000	10,808,000
Working capital turnover		4.42	4.63	4.35	4.83	4.54	4.15	4.39	4.26	4.48	3.92	3.63	4.13	3.87	3.98	4.02	3.99	4.06	4.52	5.02	6.84

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $41,950,000K ÷ ($23,656,000K – $14,157,000K)
= 4.42

The working capital turnover of Abbott Laboratories has shown a decreasing trend over the past few years, indicating a potential inefficiency in managing its working capital. The ratio, which measures the company's ability to generate revenue relative to its working capital, has decreased from 6.84 as of March 31, 2020, to 4.42 as of December 31, 2024.

A declining working capital turnover could suggest difficulties in efficiently utilizing the company's current assets to support its operations and sales. This decrease may be a cause for concern as it implies that Abbott Laboratories may be taking longer to convert its working capital into sales revenue.

Management should closely monitor and analyze the components of working capital, such as inventory, accounts receivable, and accounts payable, to identify potential inefficiencies and implement strategies to improve working capital turnover and enhance overall operational efficiency.