Stock Analysis on Net
Stock Analysis on Net

Abbott Laboratories (NYSE:ABT)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Adjustments to Financial Statements: Removal of Goodwill

Abbott Laboratories, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 73,214 74,438 75,196 72,548 67,887
Less: Goodwill 23,679 22,799 23,231 23,744 23,195
Total assets (adjusted) 49,535 51,639 51,965 48,804 44,692
Adjustment to Total Abbott Shareholders’ Investment
Total Abbott shareholders’ investment (as reported) 38,603 36,686 35,802 32,784 31,088
Less: Goodwill 23,679 22,799 23,231 23,744 23,195
Total Abbott shareholders’ investment (adjusted) 14,924 13,887 12,571 9,040 7,893

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Abbott Laboratories, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Abbott Laboratories, adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Total Asset Turnover
Reported total asset turnover 0.55 0.59 0.57 0.48 0.47
Adjusted total asset turnover 0.81 0.85 0.83 0.71 0.71
Financial Leverage
Reported financial leverage 1.90 2.03 2.10 2.21 2.18
Adjusted financial leverage 3.32 3.72 4.13 5.40 5.66
Return on Equity (ROE)
Reported ROE 14.83% 18.90% 19.75% 13.71% 11.86%
Adjusted ROE 38.35% 49.92% 56.25% 49.72% 46.71%
Return on Assets (ROA)
Reported ROA 7.82% 9.31% 9.40% 6.20% 5.43%
Adjusted ROA 11.55% 13.43% 13.61% 9.21% 8.25%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Abbott Laboratories adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Abbott Laboratories adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Abbott Laboratories adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Abbott Laboratories adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Abbott Laboratories, Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net sales 40,109 43,653 43,075 34,608 31,904
Total assets 73,214 74,438 75,196 72,548 67,887
Activity Ratio
Total asset turnover1 0.55 0.59 0.57 0.48 0.47
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net sales 40,109 43,653 43,075 34,608 31,904
Adjusted total assets 49,535 51,639 51,965 48,804 44,692
Activity Ratio
Adjusted total asset turnover2 0.81 0.85 0.83 0.71 0.71

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 40,109 ÷ 73,214 = 0.55

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 40,109 ÷ 49,535 = 0.81

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Abbott Laboratories adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 73,214 74,438 75,196 72,548 67,887
Total Abbott shareholders’ investment 38,603 36,686 35,802 32,784 31,088
Solvency Ratio
Financial leverage1 1.90 2.03 2.10 2.21 2.18
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 49,535 51,639 51,965 48,804 44,692
Adjusted total Abbott shareholders’ investment 14,924 13,887 12,571 9,040 7,893
Solvency Ratio
Adjusted financial leverage2 3.32 3.72 4.13 5.40 5.66

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Total Abbott shareholders’ investment
= 73,214 ÷ 38,603 = 1.90

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Abbott shareholders’ investment
= 49,535 ÷ 14,924 = 3.32

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Abbott Laboratories adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings 5,723 6,933 7,071 4,495 3,687
Total Abbott shareholders’ investment 38,603 36,686 35,802 32,784 31,088
Profitability Ratio
ROE1 14.83% 18.90% 19.75% 13.71% 11.86%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings 5,723 6,933 7,071 4,495 3,687
Adjusted total Abbott shareholders’ investment 14,924 13,887 12,571 9,040 7,893
Profitability Ratio
Adjusted ROE2 38.35% 49.92% 56.25% 49.72% 46.71%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net earnings ÷ Total Abbott shareholders’ investment
= 100 × 5,723 ÷ 38,603 = 14.83%

2 Adjusted ROE = 100 × Net earnings ÷ Adjusted total Abbott shareholders’ investment
= 100 × 5,723 ÷ 14,924 = 38.35%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Abbott Laboratories adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings 5,723 6,933 7,071 4,495 3,687
Total assets 73,214 74,438 75,196 72,548 67,887
Profitability Ratio
ROA1 7.82% 9.31% 9.40% 6.20% 5.43%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings 5,723 6,933 7,071 4,495 3,687
Adjusted total assets 49,535 51,639 51,965 48,804 44,692
Profitability Ratio
Adjusted ROA2 11.55% 13.43% 13.61% 9.21% 8.25%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 5,723 ÷ 73,214 = 7.82%

2 Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 5,723 ÷ 49,535 = 11.55%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Abbott Laboratories adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.