Abbott Laboratories (ABT) | Short-term (Operating) Activity

Ratios (Summary)

Abbott Laboratories, short-term (operating) activity ratios

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Turnover Ratios
Inventory turnover	10.51	11.83	11.03	9.42	10.64
Receivables turnover	5.24	5.06	4.90	4.70	5.40
Payables turnover	22.19	22.57	22.90	24.02	21.85
Working capital turnover	2.21	4.69	6.96	3.00	5.42
Average No. of Days
Average inventory processing period	35	31	33	39	34
Add: Average receivable collection period	70	72	75	78	68
Operating cycle	104	103	108	116	102
Less: Average payables payment period	16	16	16	15	17
Cash conversion cycle	88	87	92	101	85

Source: Based on data from Abbott Laboratories Annual Reports

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as revenue divided by inventory.	Abbott Laboratories's inventory turnover improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Abbott Laboratories's receivables turnover improved from 2010 to 2011 and from 2011 to 2012.
Payables turnover	An activity ratio calculated as revenue divided by payables.	Abbott Laboratories's payables turnover declined from 2010 to 2011 and from 2011 to 2012.
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	Abbott Laboratories's working capital turnover deteriorated from 2010 to 2011 and from 2011 to 2012.
Average inventory processing period	An activity ratio equal to the number of days in the period divided by inventory turnover over the period.	Abbott Laboratories's average inventory processing period improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnoverd.	Abbott Laboratories's average receivable collection period improved from 2010 to 2011 and from 2011 to 2012.
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Abbott Laboratories's operating cycle improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.	Abbott Laboratories's average payables payment period increased from 2010 to 2011 and from 2011 to 2012.
Cash conversion cycle	A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.	Abbott Laboratories's cash conversion cycle improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.

Inventory Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in thousands)
Net sales	39,873,910	38,851,259	35,166,721	30,764,707	29,527,552
Inventories	3,792,313	3,284,249	3,188,734	3,264,877	2,775,849
Inventory Turnover, Comparison to Industry
Abbott Laboratories¹	10.51	11.83	11.03	9.42	10.64
Industry, Health Care	9.83	10.67	10.56	8.38	11.01

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Inventory turnover = Net sales ÷ Inventories
= 39,873,910 ÷ 3,792,313 = 10.51

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as revenue divided by inventory.	Abbott Laboratories's inventory turnover improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.

Receivables Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in thousands)
Net sales	39,873,910	38,851,259	35,166,721	30,764,707	29,527,552
Trade receivables, less allowances	7,612,860	7,683,920	7,184,034	6,541,941	5,465,660
Receivables Turnover, Comparison to Industry
Abbott Laboratories¹	5.24	5.06	4.90	4.70	5.40
Industry, Health Care	6.68	6.47	6.47	6.01	6.76

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Receivables turnover = Net sales ÷ Trade receivables, less allowances
= 39,873,910 ÷ 7,612,860 = 5.24

Ratio	Description	The company
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Abbott Laboratories's receivables turnover improved from 2010 to 2011 and from 2011 to 2012.

Payables Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in thousands)
Net sales	39,873,910	38,851,259	35,166,721	30,764,707	29,527,552
Trade accounts payable	1,796,990	1,721,127	1,535,759	1,280,542	1,351,436
Payables Turnover, Comparison to Industry
Abbott Laboratories¹	22.19	22.57	22.90	24.02	21.85
Industry, Health Care	12.47	13.18	13.35	12.41	13.43

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Payables turnover = Net sales ÷ Trade accounts payable
= 39,873,910 ÷ 1,796,990 = 22.19

Ratio	Description	The company
Payables turnover	An activity ratio calculated as revenue divided by payables.	Abbott Laboratories's payables turnover declined from 2010 to 2011 and from 2011 to 2012.

Working Capital Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in thousands)
Current assets	31,322,583	23,768,774	22,317,529	23,313,891	17,042,559
Less: Current liabilities	13,280,176	15,480,228	17,262,434	13,049,489	11,591,908
Working capital	18,042,407	8,288,546	5,055,095	10,264,402	5,450,651
Net sales	39,873,910	38,851,259	35,166,721	30,764,707	29,527,552
Working Capital Turnover, Comparison to Industry
Abbott Laboratories¹	2.21	4.69	6.96	3.00	5.42
Industry, Health Care	4.80	4.61	4.22	3.78	5.91

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Working capital turnover = Net sales ÷ Working capital
= 39,873,910 ÷ 18,042,407 = 2.21

Ratio	Description	The company
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	Abbott Laboratories's working capital turnover deteriorated from 2010 to 2011 and from 2011 to 2012.

Average Inventory Processing Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Inventory turnover	10.51	11.83	11.03	9.42	10.64
Average Inventory Processing Period (no. of days), Comparison to Industry
Abbott Laboratories¹	35	31	33	39	34
Industry, Health Care	37	34	35	44	33

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 10.51 = 35

Ratio	Description	The company
Average inventory processing period	An activity ratio equal to the number of days in the period divided by inventory turnover over the period.	Abbott Laboratories's average inventory processing period improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.

Average Receivable Collection Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Receivables turnover	5.24	5.06	4.90	4.70	5.40
Average Receivable Collection Period (no. of days), Comparison to Industry
Abbott Laboratories¹	70	72	75	78	68
Industry, Health Care	55	56	56	61	54

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.24 = 70

Ratio	Description	The company
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnoverd.	Abbott Laboratories's average receivable collection period improved from 2010 to 2011 and from 2011 to 2012.

Operating Cycle

No. of days

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Average inventory processing period	35	31	33	39	34
Average receivable collection period	70	72	75	78	68
Operating Cycle, Comparison to Industry
Abbott Laboratories¹	104	103	108	116	102
Industry, Health Care	92	91	91	104	87

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Operating cycle = Average inventory processing period + Average receivable collection period
= 35 + 70 = 104

Ratio	Description	The company
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Abbott Laboratories's operating cycle improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.

Average Payables Payment Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Payables turnover	22.19	22.57	22.90	24.02	21.85
Average Payables Payment Period (no. of days), Comparison to Industry
Abbott Laboratories¹	16	16	16	15	17
Industry, Health Care	29	28	27	29	27

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 22.19 = 16

Ratio	Description	The company
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.	Abbott Laboratories's average payables payment period increased from 2010 to 2011 and from 2011 to 2012.

Cash Conversion Cycle

No. of days

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Average inventory processing period	35	31	33	39	34
Average receivable collection period	70	72	75	78	68
Average payables payment period	16	16	16	15	17
Cash Conversion Cycle, Comparison to Industry
Abbott Laboratories¹	88	87	92	101	85
Industry, Health Care	62	63	64	75	60

Source: Based on data from Abbott Laboratories Annual Reports

2012 Calculations

¹ Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 35 + 70 – 16 = 88

Ratio	Description	The company
Cash conversion cycle	A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.	Abbott Laboratories's cash conversion cycle improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.