Abbott Laboratories (ABT)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.67 | 1.64 | 1.63 | 1.85 | 1.72 |
| Quick ratio | 0.56 | 0.53 | 0.66 | 0.78 | 0.60 |
| Cash ratio | 0.56 | 0.53 | 0.66 | 0.78 | 0.60 |
Abbott Laboratories has maintained a relatively stable current ratio over the past five years, with values ranging from 1.63 to 1.85. This indicates that the company has sufficient current assets to cover its current liabilities, providing a measure of short-term liquidity.
In terms of the quick ratio, Abbott Laboratories has also demonstrated consistency, fluctuating between 0.53 and 0.78. The quick ratio measures the company's ability to meet its short-term obligations using its most liquid assets, excluding inventory. Although the quick ratio values are lower than the current ratio, they still indicate that Abbott Laboratories can meet its short-term liabilities efficiently.
The cash ratio, which represents the most stringent liquidity measure, has mirrored the quick ratio trends, ranging from 0.53 to 0.78. This ratio focuses on the company's ability to cover current liabilities using only its cash and cash equivalents. Abbott Laboratories' cash ratio indicates a solid ability to meet its immediate obligations with its readily available liquid assets.
Overall, Abbott Laboratories' liquidity ratios show a consistent and stable financial position, with the company maintaining adequate levels of liquidity to fulfill its short-term obligations.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 120.86 | 133.41 | 117.71 | 101.54 | 121.93 |
The cash conversion cycle of Abbott Laboratories has shown fluctuations over the past five years. In 2020, the company's cash conversion cycle was 121.93 days, indicating that it took approximately 121.93 days for the company to convert its investments in inventory and other resources into cash flows from sales.
By the end of 2021, Abbott Laboratories improved its cash conversion cycle to 101.54 days, suggesting a more efficient management of working capital and a quicker turnaround in converting investments back into cash.
Despite this improvement, the company's cash conversion cycle increased in 2022 to 117.71 days, signaling a slight slowdown in the conversion of resources into cash flows.
In 2023, the cash conversion cycle further extended to 133.41 days, indicating possible challenges in managing working capital effectively and efficiently.
However, by the end of 2024, Abbott Laboratories managed to reduce its cash conversion cycle to 120.86 days, although still higher than the levels seen in 2021.
Overall, the trend in Abbott Laboratories' cash conversion cycle suggests varying degrees of efficiency in managing working capital and converting investments into cash flows over the five-year period. It is important for the company to continue monitoring and improving its cash conversion cycle to optimize its cash flow management and operational efficiency.