Abbott Laboratories (ABT)

Cash conversion cycle

		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	—	—	—	—	—
Cash conversion cycle	days	120.86	133.41	117.71	101.54	121.93

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 120.86 + — – —
= 120.86

Based on the data provided, Abbott Laboratories' cash conversion cycle has shown varying trends over the past five years.

- As of December 31, 2020, the cash conversion cycle was 121.93 days, indicating that it took the company an average of 121.93 days to convert its investments in inventory into cash receipts from sales.

- By December 31, 2021, the cash conversion cycle improved to 101.54 days, suggesting that Abbott Laboratories managed to shorten the time it takes to convert inventory into cash.

- However, by December 31, 2022, the cash conversion cycle increased to 117.71 days, indicating a slowdown in the efficiency of the company's cash conversion process.

- The trend continued in 2023, with the cash conversion cycle rising further to 133.41 days, signaling potential challenges in managing inventory and collecting receivables efficiently.

- As of the latest data point on December 31, 2024, the cash conversion cycle improved slightly to 120.86 days, but it still remained higher than the levels seen in 2021.

Overall, the fluctuation in Abbott Laboratories' cash conversion cycle indicates potential variations in the company's ability to manage working capital effectively, which could impact its liquidity and operational performance. Further analysis of the underlying factors driving these changes would be necessary to understand the impact on the company's financial health and operational efficiency.