Abbott Laboratories (ABT)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.67 | 1.60 | 1.68 | 1.60 | 1.64 | 1.74 | 1.64 | 1.63 | 1.63 | 1.86 | 2.01 | 1.85 | 1.85 | 1.83 | 1.79 | 1.75 | 1.72 | 1.70 | 1.57 | 1.43 |
| Quick ratio | 0.56 | 0.52 | 0.52 | 0.47 | 0.53 | 0.54 | 0.57 | 0.66 | 0.66 | 0.74 | 0.75 | 0.65 | 0.78 | 0.75 | 0.71 | 0.67 | 0.60 | 0.46 | 0.46 | 0.34 |
| Cash ratio | 0.56 | 0.52 | 0.52 | 0.47 | 0.53 | 0.54 | 0.57 | 0.66 | 0.66 | 0.74 | 0.75 | 0.65 | 0.78 | 0.75 | 0.71 | 0.67 | 0.60 | 0.46 | 0.46 | 0.34 |
The liquidity ratios of Abbott Laboratories show a consistent improvement over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, gradually increased from 1.43 in March 2020 to 1.67 in December 2024, indicating a strengthening liquidity position.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited a positive trend. It rose from 0.34 in March 2020 to 0.56 in December 2024, suggesting an increasing ability to meet short-term obligations without relying on inventory liquidation.
Furthermore, the cash ratio, which specifically assesses the company's ability to cover immediate liabilities with its cash and cash equivalents, remained relatively stable within the range of 0.47 to 0.78 throughout the period, indicating a consistent level of liquidity readiness.
Overall, Abbott Laboratories demonstrated solid liquidity management as evidenced by the upward trajectory of its current and quick ratios, along with the consistent cash ratio, signifying a healthy ability to meet financial obligations in the short term.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 121.35 | 133.19 | 133.87 | 134.76 | 130.44 | 134.88 | 139.18 | 122.00 | 117.71 | 108.36 | 112.68 | 108.62 | 101.54 | 105.14 | 111.49 | 121.95 | 121.93 | 134.86 | 142.38 | 124.87 |
Abbott Laboratories' cash conversion cycle has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
The trend in Abbott Laboratories' cash conversion cycle indicates that there have been variations in the efficiency of the company's working capital management. The cycle ranged from a high of 142.38 days on June 30, 2020, to a low of 101.54 days on December 31, 2021. A shorter cash conversion cycle signifies that the company is able to collect cash more quickly from its sales, manage its inventory effectively, and pay off its liabilities efficiently.
From a peak of 142.38 days in June 2020, the cash conversion cycle saw a general decreasing trend until September 2021, reaching a low of 105.14 days. This improved efficiency suggests that Abbott Laboratories may have enhanced its working capital management during this period.
However, there was a slight increase in the cash conversion cycle towards the end of 2024, reaching 121.35 days on December 31. This increase may indicate potential challenges in managing working capital efficiently, such as slower collection of receivables, longer inventory turnover, or delayed payables.
Overall, analyzing the cash conversion cycle provides insights into how effectively Abbott Laboratories is managing its cash flows, inventory levels, and accounts receivable and payable. Further monitoring and analysis of this metric can help identify areas for improvement in working capital management practices.