Abbott Laboratories (ABT)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	6,896,000	9,882,000	9,799,000	6,838,000	3,860,000
Short-term investments	US$ in thousands	383,000	288,000	450,000	310,000	280,000
Total current liabilities	US$ in thousands	13,841,000	15,489,000	13,105,000	11,907,000	10,863,000
Cash ratio		0.53	0.66	0.78	0.60	0.38

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($6,896,000K + $383,000K) ÷ $13,841,000K
= 0.53

The cash ratio for Abbott Laboratories has fluctuated over the past five years, ranging from 0.55 in 2019 to 0.96 in 2021. The cash ratio measures the company's ability to cover its short-term liabilities with its most liquid assets, specifically cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.

In 2021, Abbott Laboratories had the highest cash ratio of 0.96, indicating that the company had $0.96 in cash and cash equivalents for every dollar of short-term liabilities. This suggests a robust liquidity position and the ability to easily cover its immediate financial obligations.

In contrast, the cash ratio decreased to 0.69 in 2023, which may reflect a lower level of liquidity compared to the previous years. However, it is important to consider the company's overall financial health and the context in which this ratio is analyzed.

Overall, the varying cash ratios for Abbott Laboratories demonstrate fluctuations in its liquidity position over the years, highlighting the importance of monitoring a company's ability to meet short-term obligations with readily available cash resources.