Abbott Laboratories (ABT)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.19 | 0.20 | 0.23 | 0.26 | 0.25 |
| Debt-to-capital ratio | 0.26 | 0.28 | 0.33 | 0.36 | 0.35 |
| Debt-to-equity ratio | 0.35 | 0.40 | 0.48 | 0.57 | 0.54 |
| Financial leverage ratio | 1.90 | 2.03 | 2.10 | 2.21 | 2.18 |
The solvency ratios for Abbott Laboratories over the past five years reflect a consistent trend of improvement in the company's financial leverage and debt management. The debt-to-assets ratio has decreased steadily from 0.27 in 2019 to 0.20 in 2023, indicating that the company has reduced its reliance on debt financing in proportion to its total assets.
Similarly, the debt-to-capital and debt-to-equity ratios have shown a decreasing trend, indicating that Abbott Laboratories has lowered its debt levels relative to its total capital and shareholder equity over the years. This demonstrates an enhanced ability to cover its financial obligations and demonstrates improved financial stability.
Additionally, the financial leverage ratio has declined from 2.18 in 2019 to 1.90 in 2023, signaling a strengthening of the company's financial structure and decreased dependency on debt to fund its operations.
Overall, the downward movement in these solvency ratios over the years suggests that Abbott Laboratories has been successfully managing its debt levels and optimizing its capital structure, which may enhance its long-term sustainability and financial health.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 11.46 | 15.89 | 16.41 | 10.14 | 7.09 |
Abbott Laboratories has shown a consistent improvement in its interest coverage ratio over the past five years, indicating the company's increasing ability to meet its interest payment obligations. The interest coverage ratio has increased from 7.87 in 2019 to 25.71 in 2023, reflecting a strengthening financial position. This trend suggests that Abbott Laboratories has been generating more than enough operating income to cover its interest expenses, which is a positive sign for investors and creditors. The consistent improvement in the interest coverage ratio could be attributed to the company's effective financial management and operational performance. It is important to note that a higher interest coverage ratio signifies a lower risk of default on interest payments and indicates the financial health and stability of Abbott Laboratories.