Abbott Laboratories (ABT)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.71 | 1.90 | 2.03 | 2.10 | 2.21 |
Abbott Laboratories has consistently maintained a strong solvency position over the years as indicated by its debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios. The debt-to-assets ratio, which measures the proportion of the company's assets financed by debt, has remained at 0.00% from 2020 to 2024, indicating that Abbott has not relied on debt to fund its operations, acquisitions, or other activities during this period.
Similarly, the debt-to-capital ratio, reflecting the percentage of the company's capital structure that is debt, has also been at 0.00% across the years, suggesting that Abbott's capital is primarily sourced from equity rather than debt.
The debt-to-equity ratio, which compares the amount of debt to the amount of equity in the company's capital structure, has consistently shown a figure of 0.00% from 2020 to 2024. This implies that Abbott has a low level of debt relative to its equity, signifying a conservative approach to financial leverage.
Furthermore, the financial leverage ratio, which provides insights into the company's overall financial risk and leverage position, has decreased steadily from 2.21 in 2020 to 1.71 in 2024. This declining trend indicates that Abbott has been reducing its reliance on debt and enhancing its financial stability and flexibility over the years.
In summary, Abbott Laboratories has demonstrated a prudent financial management strategy by maintaining minimal debt levels and a strong solvency position, which bodes well for its long-term financial health and ability to weather potential economic downturns or challenges.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 13.62 | 11.56 | 24.30 | 18.78 | 10.92 |
Interest coverage, a key financial ratio indicating a company's ability to cover its interest expenses with its operating income, is an essential indicator of Abbott Laboratories' financial health.
Based on the data provided:
- As of December 31, 2020, Abbott's interest coverage ratio was 10.92, suggesting that the company generated operating income 10.92 times higher than its interest expenses.
- By December 31, 2021, the interest coverage ratio improved significantly to 18.78, indicating a stronger ability to cover interest payments with operating income.
- The trend continued to show improvement by December 31, 2022, with an interest coverage ratio of 24.30, signaling a robust financial position.
- However, the ratio decreased to 11.56 by December 31, 2023, indicating a decline in the ability to cover interest payments with operating income compared to the previous year.
- By December 31, 2024, the interest coverage ratio slightly improved to 13.62, but it was still lower than the peak recorded in 2022.
Overall, Abbott Laboratories has shown a generally positive trend in interest coverage over the years, with some fluctuations. A higher interest coverage ratio is generally favorable as it suggests that the company is more capable of meeting its interest obligations from its operating earnings. However, the company may need to maintain a consistent and strong interest coverage ratio to ensure financial stability and sustainability in the long term.