Abbott Laboratories (ABT)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.64 | 1.74 | 1.64 | 1.68 | 1.63 | 1.86 | 2.01 | 1.85 | 1.85 | 1.83 | 1.79 | 1.75 | 1.72 | 1.70 | 1.57 | 1.43 | 1.44 | 1.54 | 1.68 | 1.58 |
| Quick ratio | 1.00 | 1.04 | 1.00 | 1.07 | 1.06 | 1.22 | 1.33 | 1.21 | 1.28 | 1.25 | 1.19 | 1.16 | 1.14 | 1.01 | 0.93 | 0.83 | 0.88 | 0.93 | 0.98 | 0.94 |
| Cash ratio | 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 | 0.38 | 0.41 | 0.37 | 0.36 |
Abbott Laboratories has maintained generally healthy liquidity ratios over the past eight quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has fluctuated within a narrow range between 1.63 and 2.01. This indicates that Abbott has ample current assets to meet its current liabilities.
The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. Abbott's quick ratio has ranged from 1.16 to 1.54 over the same period, suggesting that the company has a solid ability to cover its short-term obligations without relying on inventory.
The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, has varied from 0.69 to 0.96. While the cash ratio has declined over time, indicating a slight decrease in the company's ability to cover its current liabilities with cash alone, the ratios are still at reasonable levels.
Overall, Abbott Laboratories' liquidity ratios demonstrate sound financial health and the company's ability to meet its short-term obligations comfortably.
See also:
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 87.23 | 91.28 | 87.49 | 82.10 | 70.03 | 70.44 | 74.37 | 70.38 | 64.49 | 71.02 | 73.95 | 78.24 | 83.79 | 94.02 | 88.86 | 81.99 | 79.29 | 85.52 | 84.42 | 81.08 |
The cash conversion cycle of Abbott Laboratories has shown some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 105.94 days, which was slightly lower compared to the previous quarter at 113.85 days. This indicates that the company took fewer days to convert its investments in inventory into cash during Q4 2023.
Looking back at the trend, the cash conversion cycle has generally been increasing since Q1 2022. In Q1 2022, it was at 76.69 days, and it has steadily increased until Q3 2023. This suggests that Abbott Laboratories may be facing challenges in efficiently managing its inventory, accounts receivable, and accounts payable during this period, leading to a longer time to convert investments into cash.
Overall, Abbott Laboratories should closely monitor its cash conversion cycle and continue to assess and improve its working capital management processes to optimize its cash flow and operational efficiency.