Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
AbbVie Inc., solvency ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The solvency position exhibited a complex pattern over the observed period. Initially, from 2021 to 2022, most solvency ratios indicated improvement. However, 2023 and particularly 2024 saw a marked deterioration in several key metrics, suggesting increased financial risk. A stabilization appears to occur in 2025 for the ratios reported.
- Leverage Ratios
- Debt to equity, including operating lease liability, increased substantially from 3.72 in 2022 to 20.46 in 2024, indicating a significant rise in debt relative to equity. The ratio excluding operating lease liability followed a similar trend, moving from 3.67 to 20.19 over the same period. Debt to capital ratios, both including and excluding operating lease liabilities, remained relatively stable between 2021 and 2023, but increased to 0.95 in 2024 and 1.05 in 2025, suggesting a growing reliance on debt financing. Debt to assets ratios remained relatively stable, fluctuating between 0.44 and 0.53, with no clear trend.
- Financial Leverage
- Financial leverage experienced a dramatic increase, rising from 8.04 in 2022 to 40.65 in 2024. This substantial increase suggests a considerably higher proportion of assets are financed by debt, amplifying both potential returns and risks. No value is available for 2025.
- Coverage Ratios
- Interest coverage and fixed charge coverage ratios both decreased significantly from 2022 to 2024. Interest coverage fell from 7.04 to 2.32, and fixed charge coverage decreased from 6.54 to 2.24. These declines indicate a weakening ability to meet interest and fixed financing obligations from operating earnings. Both ratios show a modest recovery in 2025, to 3.28 and 3.12 respectively, but remain below their 2022 levels.
The substantial increase in leverage ratios in 2024, coupled with the concurrent decline in coverage ratios, raises concerns about the company’s ability to service its debt. While a slight improvement is observed in 2025 for the coverage ratios, the high levels of debt relative to equity and capital remain a significant factor. Continued monitoring of these trends is warranted.
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Debt Ratios
Coverage Ratios
Debt to Equity
AbbVie Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 2,499) | —) | —) | 1) | 14) | |
| Current portion of long-term debt and finance lease obligations | 6,056) | 6,804) | 7,191) | 4,135) | 12,481) | |
| Long-term debt and finance lease obligations, excluding current portion | 58,941) | 60,340) | 52,194) | 59,135) | 64,189) | |
| Total debt | 67,496) | 67,144) | 59,385) | 63,271) | 76,684) | |
| Stockholders’ equity (deficit) | (3,270) | 3,325) | 10,360) | 17,254) | 15,408) | |
| Solvency Ratio | ||||||
| Debt to equity1 | — | 20.19 | 5.73 | 3.67 | 4.98 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Amgen Inc. | 6.31 | 10.23 | 10.37 | 10.64 | 4.97 | |
| Bristol-Myers Squibb Co. | 2.44 | 3.04 | 1.35 | 1.27 | 1.24 | |
| Danaher Corp. | 0.35 | 0.32 | 0.34 | 0.39 | 0.49 | |
| Eli Lilly & Co. | 1.60 | 2.37 | 2.34 | 1.52 | 1.88 | |
| Gilead Sciences Inc. | 1.10 | 1.38 | 1.09 | 1.19 | 1.27 | |
| Johnson & Johnson | 0.59 | 0.51 | 0.43 | 0.52 | 0.46 | |
| Merck & Co. Inc. | 0.94 | 0.80 | 0.93 | 0.67 | 0.87 | |
| Pfizer Inc. | 0.75 | 0.73 | 0.81 | 0.37 | 0.50 | |
| Regeneron Pharmaceuticals Inc. | 0.09 | 0.09 | 0.10 | 0.12 | 0.14 | |
| Thermo Fisher Scientific Inc. | 0.74 | 0.63 | 0.75 | 0.78 | 0.85 | |
| Vertex Pharmaceuticals Inc. | 0.01 | 0.01 | 0.02 | 0.03 | 0.06 | |
| Debt to Equity, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.02 | 1.04 | 0.97 | 0.80 | 0.93 | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.86 | 0.87 | 0.82 | 0.72 | 0.80 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity (deficit)
= 67,496 ÷ -3,270 = —
2 Click competitor name to see calculations.
The debt to equity ratio exhibits significant fluctuations over the observed period. Initially, the ratio decreased, followed by a substantial increase, and a projected continuation of elevated levels.
- Debt to Equity Ratio - Trend Analysis
- In 2021, the debt to equity ratio stood at 4.98. A decrease was noted in 2022, with the ratio falling to 3.67. This indicates a relative improvement in the company’s financial leverage position during that year.
- However, 2023 saw a reversal of this trend, with the ratio increasing to 5.73. This suggests a growing reliance on debt financing relative to equity. The most dramatic change occurred in 2024, where the ratio surged to 20.19, signifying a considerable increase in financial leverage.
- The trend continues into 2025, with the ratio remaining high, although a specific value is not presented. The negative stockholders’ equity in 2025 further exacerbates the implications of the high debt level, potentially indicating significant financial risk.
The substantial increase in the debt to equity ratio, particularly in 2024, warrants further investigation. The concurrent decline in stockholders’ equity contributes to the escalating ratio and suggests potential concerns regarding the company’s capital structure and financial stability. The projected continuation of this trend into 2025, coupled with negative equity, highlights the need for careful monitoring of the company’s debt management strategies.
- Stockholders’ Equity Impact
- The decline in stockholders’ equity from US$15,408 million in 2021 to a deficit of US$3,270 million in 2025 is a critical factor driving the increase in the debt to equity ratio. This decrease in equity amplifies the impact of the relatively stable debt levels, resulting in a significantly higher ratio.
The observed patterns suggest a shift in the company’s financing strategy, potentially involving increased debt utilization and/or a reduction in equity. The implications of these changes should be carefully evaluated in the context of the company’s overall financial performance and future prospects.
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Debt to Equity (including Operating Lease Liability)
AbbVie Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 2,499) | —) | —) | 1) | 14) | |
| Current portion of long-term debt and finance lease obligations | 6,056) | 6,804) | 7,191) | 4,135) | 12,481) | |
| Long-term debt and finance lease obligations, excluding current portion | 58,941) | 60,340) | 52,194) | 59,135) | 64,189) | |
| Total debt | 67,496) | 67,144) | 59,385) | 63,271) | 76,684) | |
| Current operating lease liabilities (included in Accounts payable and accrued liabilities) | 194) | 178) | 166) | 166) | 178) | |
| Noncurrent operating lease liabilities (included in Other long-term liabilities) | 689) | 697) | 735) | 754) | 713) | |
| Total debt (including operating lease liability) | 68,379) | 68,019) | 60,286) | 64,191) | 77,575) | |
| Stockholders’ equity (deficit) | (3,270) | 3,325) | 10,360) | 17,254) | 15,408) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | — | 20.46 | 5.82 | 3.72 | 5.03 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Amgen Inc. | 6.40 | 10.36 | 10.50 | 10.83 | 5.07 | |
| Bristol-Myers Squibb Co. | 2.55 | 3.13 | 1.41 | 1.31 | 1.27 | |
| Danaher Corp. | 0.37 | 0.35 | 0.37 | 0.41 | 0.52 | |
| Eli Lilly & Co. | 1.65 | 2.45 | 2.44 | 1.59 | 1.96 | |
| Gilead Sciences Inc. | 1.13 | 1.41 | 1.12 | 1.22 | 1.30 | |
| Johnson & Johnson | 0.60 | 0.53 | 0.44 | 0.53 | 0.47 | |
| Merck & Co. Inc. | 0.96 | 0.83 | 0.97 | 0.70 | 0.91 | |
| Pfizer Inc. | 0.78 | 0.76 | 0.84 | 0.41 | 0.54 | |
| Regeneron Pharmaceuticals Inc. | 0.10 | 0.10 | 0.11 | 0.12 | 0.15 | |
| Thermo Fisher Scientific Inc. | 0.76 | 0.66 | 0.78 | 0.82 | 0.89 | |
| Vertex Pharmaceuticals Inc. | 0.11 | 0.11 | 0.05 | 0.06 | 0.10 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.05 | 1.07 | 1.00 | 0.83 | 0.96 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.90 | 0.90 | 0.85 | 0.76 | 0.83 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity (deficit)
= 68,379 ÷ -3,270 = —
2 Click competitor name to see calculations.
The debt to equity ratio, incorporating operating lease liabilities, exhibits significant fluctuations over the observed period. Initially, the ratio decreased, followed by a substantial increase, and then stabilization. A detailed examination of the underlying components reveals the drivers of these changes.
- Total Debt (including operating lease liability)
- Total debt decreased from $77.575 billion in 2021 to $60.286 billion in 2023. A subsequent increase is observed, reaching $68.379 billion by the end of 2025. The decrease between 2021 and 2023 suggests a period of debt reduction, while the increases in 2024 and 2025 indicate renewed borrowing or limited debt repayment.
- Stockholders’ Equity (deficit)
- Stockholders’ equity initially increased from $15.408 billion in 2021 to $17.254 billion in 2022. However, a marked decline is then observed, falling to $10.360 billion in 2023 and further to $3.325 billion in 2024. By 2025, stockholders’ equity has transitioned into a deficit of -$3.270 billion. This substantial erosion of equity is a key factor influencing the debt to equity ratio.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio decreased from 5.03 in 2021 to 3.72 in 2022, coinciding with the increase in equity and decrease in debt. The ratio then increased to 5.82 in 2023, driven by the continued decline in equity and a smaller reduction in debt. A dramatic increase to 20.46 is observed in 2024, primarily attributable to the significant reduction in stockholders’ equity. The lack of a value for 2025 prevents assessment of whether this high ratio is sustained, but the negative equity position suggests continued high leverage.
The increasing debt to equity ratio, particularly the substantial rise in 2024, warrants further investigation. The transition of stockholders’ equity to a deficit is a significant concern and suggests potential financial risk. The observed trends indicate a growing reliance on debt financing relative to equity, which could increase financial vulnerability.
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Debt to Capital
AbbVie Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 2,499) | —) | —) | 1) | 14) | |
| Current portion of long-term debt and finance lease obligations | 6,056) | 6,804) | 7,191) | 4,135) | 12,481) | |
| Long-term debt and finance lease obligations, excluding current portion | 58,941) | 60,340) | 52,194) | 59,135) | 64,189) | |
| Total debt | 67,496) | 67,144) | 59,385) | 63,271) | 76,684) | |
| Stockholders’ equity (deficit) | (3,270) | 3,325) | 10,360) | 17,254) | 15,408) | |
| Total capital | 64,226) | 70,469) | 69,745) | 80,525) | 92,092) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 1.05 | 0.95 | 0.85 | 0.79 | 0.83 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Amgen Inc. | 0.86 | 0.91 | 0.91 | 0.91 | 0.83 | |
| Bristol-Myers Squibb Co. | 0.71 | 0.75 | 0.57 | 0.56 | 0.55 | |
| Danaher Corp. | 0.26 | 0.24 | 0.26 | 0.28 | 0.33 | |
| Eli Lilly & Co. | 0.62 | 0.70 | 0.70 | 0.60 | 0.65 | |
| Gilead Sciences Inc. | 0.52 | 0.58 | 0.52 | 0.54 | 0.56 | |
| Johnson & Johnson | 0.37 | 0.34 | 0.30 | 0.34 | 0.31 | |
| Merck & Co. Inc. | 0.48 | 0.44 | 0.48 | 0.40 | 0.46 | |
| Pfizer Inc. | 0.43 | 0.42 | 0.45 | 0.27 | 0.33 | |
| Regeneron Pharmaceuticals Inc. | 0.08 | 0.08 | 0.09 | 0.11 | 0.13 | |
| Thermo Fisher Scientific Inc. | 0.42 | 0.39 | 0.43 | 0.44 | 0.46 | |
| Vertex Pharmaceuticals Inc. | 0.01 | 0.01 | 0.02 | 0.03 | 0.05 | |
| Debt to Capital, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.50 | 0.51 | 0.49 | 0.44 | 0.48 | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.46 | 0.47 | 0.45 | 0.42 | 0.44 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 67,496 ÷ 64,226 = 1.05
2 Click competitor name to see calculations.
The Debt to Capital ratio exhibits a notable upward trend over the observed period. Initially, the ratio decreased from 0.83 in 2021 to 0.79 in 2022, indicating a slight improvement in the company’s capital structure with a smaller proportion of debt relative to total capital. However, this trend reversed in subsequent years.
- Debt to Capital Ratio Trend
- The ratio increased to 0.85 in 2023, then further to 0.95 in 2024, and reached 1.05 in 2025. This signifies a growing reliance on debt financing relative to capital. The increase suggests a potential shift in the company’s financial leverage strategy or a change in its access to capital markets.
Total debt decreased from US$76,684 million in 2021 to US$63,271 million in 2022, and continued to decline to US$59,385 million in 2023. However, debt levels began to rise again, reaching US$67,144 million in 2024 and US$67,496 million in 2025. This suggests a period of debt reduction followed by renewed borrowing.
- Total Capital Trend
- Total capital experienced a decline from US$92,092 million in 2021 to US$64,226 million in 2025. This decrease, occurring alongside the later increases in debt, contributes to the rising Debt to Capital ratio. The reduction in total capital could be attributed to factors such as share repurchases, dividend payments, or retained earnings policies.
The combined effect of fluctuating debt levels and decreasing total capital has resulted in a significant increase in the Debt to Capital ratio. The ratio exceeding 1.00 in 2025 indicates that debt now surpasses total capital, potentially increasing financial risk and vulnerability to economic downturns.
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Debt to Capital (including Operating Lease Liability)
AbbVie Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 2,499) | —) | —) | 1) | 14) | |
| Current portion of long-term debt and finance lease obligations | 6,056) | 6,804) | 7,191) | 4,135) | 12,481) | |
| Long-term debt and finance lease obligations, excluding current portion | 58,941) | 60,340) | 52,194) | 59,135) | 64,189) | |
| Total debt | 67,496) | 67,144) | 59,385) | 63,271) | 76,684) | |
| Current operating lease liabilities (included in Accounts payable and accrued liabilities) | 194) | 178) | 166) | 166) | 178) | |
| Noncurrent operating lease liabilities (included in Other long-term liabilities) | 689) | 697) | 735) | 754) | 713) | |
| Total debt (including operating lease liability) | 68,379) | 68,019) | 60,286) | 64,191) | 77,575) | |
| Stockholders’ equity (deficit) | (3,270) | 3,325) | 10,360) | 17,254) | 15,408) | |
| Total capital (including operating lease liability) | 65,109) | 71,344) | 70,646) | 81,445) | 92,983) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 1.05 | 0.95 | 0.85 | 0.79 | 0.83 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Amgen Inc. | 0.86 | 0.91 | 0.91 | 0.92 | 0.84 | |
| Bristol-Myers Squibb Co. | 0.72 | 0.76 | 0.58 | 0.57 | 0.56 | |
| Danaher Corp. | 0.27 | 0.26 | 0.27 | 0.29 | 0.34 | |
| Eli Lilly & Co. | 0.62 | 0.71 | 0.71 | 0.61 | 0.66 | |
| Gilead Sciences Inc. | 0.53 | 0.59 | 0.53 | 0.55 | 0.56 | |
| Johnson & Johnson | 0.38 | 0.35 | 0.31 | 0.35 | 0.32 | |
| Merck & Co. Inc. | 0.49 | 0.45 | 0.49 | 0.41 | 0.48 | |
| Pfizer Inc. | 0.44 | 0.43 | 0.46 | 0.29 | 0.35 | |
| Regeneron Pharmaceuticals Inc. | 0.09 | 0.09 | 0.10 | 0.11 | 0.13 | |
| Thermo Fisher Scientific Inc. | 0.43 | 0.40 | 0.44 | 0.45 | 0.47 | |
| Vertex Pharmaceuticals Inc. | 0.10 | 0.10 | 0.04 | 0.06 | 0.09 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.51 | 0.52 | 0.50 | 0.45 | 0.49 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.47 | 0.47 | 0.46 | 0.43 | 0.45 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 68,379 ÷ 65,109 = 1.05
2 Click competitor name to see calculations.
The Debt to Capital ratio, inclusive of operating lease liabilities, exhibits a notable upward trend over the observed five-year period. Initial values indicate a relatively high level of leverage, which subsequently increased through the end of the period.
- Total Debt (including operating lease liability)
- Total debt decreased from US$77,575 million in 2021 to US$60,286 million in 2023, representing a reduction in overall borrowing. However, debt levels then increased in subsequent years, reaching US$68,379 million by 2025. This suggests a renewed reliance on debt financing towards the end of the period.
- Total Capital (including operating lease liability)
- Total capital experienced a consistent decline from US$92,983 million in 2021 to US$65,109 million in 2025. This decrease in capital base occurred alongside the later increase in debt, contributing to the rising Debt to Capital ratio.
- Debt to Capital (including operating lease liability)
- The Debt to Capital ratio began at 0.83 in 2021 and decreased to 0.79 in 2022. It then increased to 0.85 in 2023, before accelerating to 0.95 in 2024 and reaching 1.05 in 2025. This progression indicates a growing proportion of debt relative to the company’s capital structure. A ratio exceeding 1.0 signifies that debt financing surpasses equity and other capital sources.
The combined effect of decreasing capital and increasing debt, particularly in the final two years, resulted in a substantial increase in the Debt to Capital ratio. This trend warrants further investigation to understand the underlying drivers and potential implications for the company’s financial risk profile.
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Debt to Assets
AbbVie Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 2,499) | —) | —) | 1) | 14) | |
| Current portion of long-term debt and finance lease obligations | 6,056) | 6,804) | 7,191) | 4,135) | 12,481) | |
| Long-term debt and finance lease obligations, excluding current portion | 58,941) | 60,340) | 52,194) | 59,135) | 64,189) | |
| Total debt | 67,496) | 67,144) | 59,385) | 63,271) | 76,684) | |
| Total assets | 133,960) | 135,161) | 134,711) | 138,805) | 146,529) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.50 | 0.50 | 0.44 | 0.46 | 0.52 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Amgen Inc. | 0.60 | 0.65 | 0.67 | 0.60 | 0.54 | |
| Bristol-Myers Squibb Co. | 0.50 | 0.54 | 0.42 | 0.41 | 0.41 | |
| Danaher Corp. | 0.22 | 0.21 | 0.22 | 0.23 | 0.27 | |
| Eli Lilly & Co. | 0.38 | 0.43 | 0.39 | 0.33 | 0.35 | |
| Gilead Sciences Inc. | 0.42 | 0.45 | 0.40 | 0.40 | 0.39 | |
| Johnson & Johnson | 0.24 | 0.20 | 0.18 | 0.21 | 0.19 | |
| Merck & Co. Inc. | 0.36 | 0.32 | 0.33 | 0.28 | 0.31 | |
| Pfizer Inc. | 0.31 | 0.30 | 0.32 | 0.18 | 0.21 | |
| Regeneron Pharmaceuticals Inc. | 0.07 | 0.07 | 0.08 | 0.09 | 0.11 | |
| Thermo Fisher Scientific Inc. | 0.36 | 0.32 | 0.35 | 0.35 | 0.37 | |
| Vertex Pharmaceuticals Inc. | 0.00 | 0.01 | 0.02 | 0.03 | 0.04 | |
| Debt to Assets, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.35 | 0.35 | 0.34 | 0.31 | 0.32 | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.32 | 0.32 | 0.30 | 0.28 | 0.30 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 67,496 ÷ 133,960 = 0.50
2 Click competitor name to see calculations.
The debt-to-assets ratio exhibited a declining trend from 2021 to 2023, followed by stabilization in the subsequent two years. This indicates a shifting leverage profile over the analyzed period.
- Debt to Assets Ratio - Overall Trend
- The ratio decreased from 0.52 in 2021 to 0.44 in 2023, representing a reduction in the proportion of assets financed by debt. However, the ratio then increased to 0.50 in both 2024 and 2025, suggesting a potential shift towards increased reliance on debt financing or a decrease in the asset base relative to debt.
- Debt to Assets Ratio - 2021-2023
- The initial decline in the ratio from 2021 through 2023 coincided with a decrease in total debt, from US$76,684 million to US$59,385 million, while total assets also decreased, though to a lesser extent, from US$146,529 million to US$134,711 million. This suggests the company was actively reducing its debt burden during this period.
- Debt to Assets Ratio - 2023-2025
- From 2023 to 2025, total debt experienced a modest increase, rising from US$59,385 million to US$67,496 million. Total assets also decreased slightly, from US$134,711 million to US$133,960 million. The combined effect of these changes resulted in the ratio stabilizing at 0.50 for both 2024 and 2025, indicating a pause in the deleveraging trend.
The stabilization of the debt-to-assets ratio at 0.50 in the most recent two years warrants further investigation to determine the underlying drivers. It is important to assess whether the increased debt is funding strategic investments or if it reflects a change in the company’s capital structure strategy.
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Debt to Assets (including Operating Lease Liability)
AbbVie Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 2,499) | —) | —) | 1) | 14) | |
| Current portion of long-term debt and finance lease obligations | 6,056) | 6,804) | 7,191) | 4,135) | 12,481) | |
| Long-term debt and finance lease obligations, excluding current portion | 58,941) | 60,340) | 52,194) | 59,135) | 64,189) | |
| Total debt | 67,496) | 67,144) | 59,385) | 63,271) | 76,684) | |
| Current operating lease liabilities (included in Accounts payable and accrued liabilities) | 194) | 178) | 166) | 166) | 178) | |
| Noncurrent operating lease liabilities (included in Other long-term liabilities) | 689) | 697) | 735) | 754) | 713) | |
| Total debt (including operating lease liability) | 68,379) | 68,019) | 60,286) | 64,191) | 77,575) | |
| Total assets | 133,960) | 135,161) | 134,711) | 138,805) | 146,529) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.51 | 0.50 | 0.45 | 0.46 | 0.53 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Amgen Inc. | 0.61 | 0.66 | 0.67 | 0.61 | 0.56 | |
| Bristol-Myers Squibb Co. | 0.52 | 0.55 | 0.44 | 0.42 | 0.42 | |
| Danaher Corp. | 0.24 | 0.22 | 0.23 | 0.25 | 0.28 | |
| Eli Lilly & Co. | 0.39 | 0.44 | 0.41 | 0.34 | 0.36 | |
| Gilead Sciences Inc. | 0.43 | 0.46 | 0.41 | 0.41 | 0.40 | |
| Johnson & Johnson | 0.25 | 0.21 | 0.18 | 0.22 | 0.19 | |
| Merck & Co. Inc. | 0.37 | 0.33 | 0.34 | 0.29 | 0.33 | |
| Pfizer Inc. | 0.32 | 0.31 | 0.33 | 0.20 | 0.23 | |
| Regeneron Pharmaceuticals Inc. | 0.07 | 0.08 | 0.08 | 0.09 | 0.11 | |
| Thermo Fisher Scientific Inc. | 0.37 | 0.34 | 0.37 | 0.37 | 0.38 | |
| Vertex Pharmaceuticals Inc. | 0.08 | 0.08 | 0.04 | 0.05 | 0.07 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.37 | 0.37 | 0.35 | 0.32 | 0.34 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.33 | 0.33 | 0.32 | 0.29 | 0.31 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 68,379 ÷ 133,960 = 0.51
2 Click competitor name to see calculations.
The debt to assets ratio, including operating lease liability, demonstrates a fluctuating pattern over the five-year period. Initially, the ratio decreased before stabilizing and then increasing slightly. Total debt decreased from 2021 to 2023, while total assets also declined, contributing to the initial shift in the ratio. Subsequently, debt increased in 2024 and 2025, while assets experienced a smaller decline, resulting in a rise in the ratio.
- Debt to Assets Ratio Trend
- In 2021, the debt to assets ratio was 0.53. This decreased to 0.46 in 2022 and remained relatively stable at 0.45 in 2023. An increase to 0.50 was observed in 2024, followed by a further increase to 0.51 in 2025. This indicates a growing reliance on debt financing relative to the asset base in the latter two years of the observed period.
- Total Debt Evolution
- Total debt, including operating lease liability, began at US$77,575 million in 2021. It decreased to US$64,191 million in 2022 and further to US$60,286 million in 2023. However, debt levels increased to US$68,019 million in 2024 and US$68,379 million in 2025. This suggests a period of debt reduction followed by renewed borrowing or limited debt repayment.
- Total Assets Evolution
- Total assets decreased consistently over the period, starting at US$146,529 million in 2021. The asset base contracted to US$138,805 million in 2022, then to US$134,711 million in 2023. A slight increase to US$135,161 million occurred in 2024, but assets subsequently decreased to US$133,960 million in 2025. The consistent decline in total assets, coupled with the later increase in debt, contributes to the observed increase in the debt to assets ratio.
The combined effect of decreasing assets and increasing debt in the final two years suggests a potential shift in the company’s capital structure, with a greater proportion of assets financed by debt. Continued monitoring of these trends is warranted to assess the long-term implications for financial flexibility and risk.
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Financial Leverage
AbbVie Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 133,960) | 135,161) | 134,711) | 138,805) | 146,529) | |
| Stockholders’ equity (deficit) | (3,270) | 3,325) | 10,360) | 17,254) | 15,408) | |
| Solvency Ratio | ||||||
| Financial leverage1 | — | 40.65 | 13.00 | 8.04 | 9.51 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Amgen Inc. | 10.46 | 15.63 | 15.59 | 17.79 | 9.13 | |
| Bristol-Myers Squibb Co. | 4.87 | 5.67 | 3.23 | 3.12 | 3.04 | |
| Danaher Corp. | 1.59 | 1.57 | 1.58 | 1.68 | 1.84 | |
| Eli Lilly & Co. | 4.24 | 5.55 | 5.94 | 4.65 | 5.44 | |
| Gilead Sciences Inc. | 2.60 | 3.05 | 2.72 | 2.97 | 3.23 | |
| Johnson & Johnson | 2.44 | 2.52 | 2.44 | 2.44 | 2.46 | |
| Merck & Co. Inc. | 2.60 | 2.53 | 2.84 | 2.37 | 2.77 | |
| Pfizer Inc. | 2.41 | 2.42 | 2.54 | 2.06 | 2.35 | |
| Regeneron Pharmaceuticals Inc. | 1.30 | 1.29 | 1.27 | 1.29 | 1.36 | |
| Thermo Fisher Scientific Inc. | 2.07 | 1.96 | 2.11 | 2.21 | 2.33 | |
| Vertex Pharmaceuticals Inc. | 1.37 | 1.37 | 1.29 | 1.30 | 1.33 | |
| Financial Leverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 2.87 | 2.93 | 2.85 | 2.62 | 2.86 | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.72 | 2.75 | 2.70 | 2.57 | 2.69 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity (deficit)
= 133,960 ÷ -3,270 = —
2 Click competitor name to see calculations.
An examination of the financial information reveals a significant shift in the company’s financial leverage over the observed period. Total assets experienced a decline from 2021 to 2023, followed by a slight increase in 2024 and a further decrease in 2025. Simultaneously, stockholders’ equity exhibited volatility, initially increasing before experiencing a substantial decrease, culminating in a deficit by the end of 2025.
- Financial Leverage
- The financial leverage ratio demonstrates a notable trend. In 2021, the ratio stood at 9.51. It decreased to 8.04 in 2022, suggesting a reduced reliance on debt financing relative to equity. However, a substantial increase was observed in 2023, with the ratio climbing to 13.00. This indicates a growing dependence on debt. The most dramatic change occurred in 2024, where the ratio surged to 40.65, signifying a considerable increase in financial leverage. The absence of a value for 2025 prevents a complete assessment of the trend, but the preceding values suggest a potentially precarious financial position.
- Stockholders’ Equity Trend
- Stockholders’ equity began at US$15,408 million in 2021 and rose to US$17,254 million in 2022. This positive trend reversed in 2023, with equity decreasing to US$10,360 million. The decline continued sharply in 2024, falling to US$3,325 million, and ultimately resulting in a deficit of US$3,270 million by 2025. This erosion of equity likely contributed to the escalating financial leverage ratio.
- Asset Position
- Total assets decreased from US$146,529 million in 2021 to US$134,711 million in 2023. A modest recovery occurred in 2024, with assets reaching US$135,161 million, but this was followed by a further decline to US$133,960 million in 2025. The decreasing asset base, coupled with declining equity, likely exacerbated the increase in financial leverage.
The combined effect of decreasing equity and fluctuating assets has resulted in a significant increase in financial leverage. The substantial rise in the leverage ratio, particularly in 2024, warrants further investigation to understand the underlying causes and potential risks associated with this increased debt burden.
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Interest Coverage
AbbVie Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to AbbVie Inc. | 4,226) | 4,278) | 4,863) | 11,836) | 11,542) | |
| Add: Net income attributable to noncontrolling interest | 7) | 8) | 10) | 9) | 7) | |
| Add: Income tax expense | 2,364) | (570) | 1,377) | 1,632) | 1,440) | |
| Add: Interest expense | 2,893) | 2,808) | 2,224) | 2,230) | 2,423) | |
| Earnings before interest and tax (EBIT) | 9,490) | 6,524) | 8,474) | 15,707) | 15,412) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 3.28 | 2.32 | 3.81 | 7.04 | 6.36 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Amgen Inc. | 4.26 | 2.46 | 3.73 | 6.22 | 6.60 | |
| Bristol-Myers Squibb Co. | 5.93 | -3.30 | 8.24 | 7.26 | 7.07 | |
| Danaher Corp. | 16.97 | 17.71 | 18.64 | 40.30 | 32.92 | |
| Eli Lilly & Co. | 29.75 | 17.24 | 14.49 | 21.53 | 19.12 | |
| Gilead Sciences Inc. | 10.57 | 1.71 | 8.27 | 7.22 | 9.27 | |
| Johnson & Johnson | 34.55 | 23.10 | 20.51 | 79.71 | 125.46 | |
| Merck & Co. Inc. | 16.52 | 16.69 | 2.65 | 18.09 | 18.22 | |
| Pfizer Inc. | 3.82 | 3.60 | 1.48 | 29.05 | 19.83 | |
| Regeneron Pharmaceuticals Inc. | 120.42 | 87.59 | 58.52 | 82.80 | 163.75 | |
| Thermo Fisher Scientific Inc. | 6.12 | 6.03 | 5.54 | 11.56 | 17.49 | |
| Vertex Pharmaceuticals Inc. | 350.11 | 9.12 | 100.32 | 78.23 | 45.40 | |
| Interest Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 9.83 | 5.51 | 6.43 | 15.40 | 14.91 | |
| Interest Coverage, Industry | ||||||
| Health Care | 8.96 | 6.11 | 7.51 | 14.75 | 14.14 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= 9,490 ÷ 2,893 = 3.28
2 Click competitor name to see calculations.
The period under review demonstrates significant fluctuations in the interest coverage ratio. Initial values indicate a healthy ability to meet interest obligations, but a marked decline is observed before a partial recovery.
- Earnings Before Interest and Tax (EBIT)
- EBIT exhibited an initial increase from 2021 to 2022, moving from US$15,412 million to US$15,707 million. However, a substantial decrease occurred in 2023, falling to US$8,474 million, followed by a further reduction in 2024 to US$6,524 million. A partial recovery is then noted in 2025, with EBIT reaching US$9,490 million.
- Interest Expense
- Interest expense remained relatively stable between 2021 and 2023, fluctuating between US$2,224 million and US$2,423 million. An increase is then observed in 2024, rising to US$2,808 million, and continuing into 2025 with a value of US$2,893 million.
- Interest Coverage Ratio
- The interest coverage ratio began at 6.36 in 2021 and improved to 7.04 in 2022, indicating a strengthening ability to cover interest payments with earnings. A significant decline then commenced, with the ratio falling to 3.81 in 2023 and further to 2.32 in 2024. A modest recovery is apparent in 2025, with the ratio increasing to 3.28. The decrease in the ratio from 2022 to 2024 is primarily driven by the combination of decreasing EBIT and increasing interest expense. While the 2025 value represents an improvement, it remains considerably lower than the levels observed in 2021 and 2022.
The observed trend suggests a weakening in the company’s capacity to comfortably cover its interest obligations during the 2023-2024 period, followed by a slight improvement in 2025. Continued monitoring of both EBIT and interest expense is warranted to assess the sustainability of this recovery.
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Fixed Charge Coverage
AbbVie Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to AbbVie Inc. | 4,226) | 4,278) | 4,863) | 11,836) | 11,542) | |
| Add: Net income attributable to noncontrolling interest | 7) | 8) | 10) | 9) | 7) | |
| Add: Income tax expense | 2,364) | (570) | 1,377) | 1,632) | 1,440) | |
| Add: Interest expense | 2,893) | 2,808) | 2,224) | 2,230) | 2,423) | |
| Earnings before interest and tax (EBIT) | 9,490) | 6,524) | 8,474) | 15,707) | 15,412) | |
| Add: Operating lease cost | 213) | 196) | 189) | 201) | 226) | |
| Earnings before fixed charges and tax | 9,703) | 6,720) | 8,663) | 15,908) | 15,638) | |
| Interest expense | 2,893) | 2,808) | 2,224) | 2,230) | 2,423) | |
| Operating lease cost | 213) | 196) | 189) | 201) | 226) | |
| Fixed charges | 3,106) | 3,004) | 2,413) | 2,431) | 2,649) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 3.12 | 2.24 | 3.59 | 6.54 | 5.90 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Amgen Inc. | 3.97 | 2.37 | 3.55 | 5.52 | 5.67 | |
| Bristol-Myers Squibb Co. | 5.27 | -2.75 | 6.69 | 6.30 | 6.01 | |
| Danaher Corp. | 8.29 | 9.05 | 9.55 | 13.41 | 10.85 | |
| Eli Lilly & Co. | 29.75 | 13.81 | 10.98 | 15.17 | 13.33 | |
| Gilead Sciences Inc. | 9.21 | 1.61 | 7.18 | 6.30 | 8.15 | |
| Johnson & Johnson | 28.82 | 18.47 | 16.50 | 38.72 | 48.16 | |
| Merck & Co. Inc. | 12.84 | 13.31 | 2.27 | 13.69 | 13.08 | |
| Pfizer Inc. | 3.37 | 3.13 | 1.34 | 18.79 | 14.22 | |
| Regeneron Pharmaceuticals Inc. | 66.71 | 53.13 | 46.55 | 68.67 | 138.96 | |
| Thermo Fisher Scientific Inc. | 5.04 | 5.01 | 4.61 | 8.12 | 12.19 | |
| Vertex Pharmaceuticals Inc. | 23.32 | 2.85 | 48.66 | 47.97 | 29.62 | |
| Fixed Charge Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 8.45 | 4.80 | 5.40 | 11.85 | 11.49 | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 7.45 | 5.15 | 6.08 | 10.95 | 10.48 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 9,703 ÷ 3,106 = 3.12
2 Click competitor name to see calculations.
The company’s fixed charge coverage exhibited fluctuating performance between 2021 and 2025. Earnings before fixed charges and tax decreased significantly over the period, while fixed charges generally increased, contributing to the observed changes in coverage.
- Earnings Before Fixed Charges and Tax
- Earnings before fixed charges and tax remained relatively stable between 2021 and 2022, at approximately US$15.6 billion and US$15.9 billion, respectively. A substantial decline was then observed in 2023, falling to US$8.7 billion. This downward trend continued into 2024, reaching US$6.7 billion, before a partial recovery to US$9.7 billion in 2025. This indicates increasing pressure on profitability and the ability to meet fixed obligations.
- Fixed Charges
- Fixed charges decreased slightly from US$2.6 billion in 2021 to US$2.4 billion in 2022. They remained relatively consistent at around US$2.4 billion in 2023. An increase was noted in 2024, rising to US$3.0 billion, and continued to increase in 2025, reaching US$3.1 billion. This suggests a growing burden from fixed financial obligations.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio peaked at 6.54 in 2022, indicating a strong ability to cover fixed charges with available earnings. However, the ratio declined sharply to 3.59 in 2023, reflecting the decrease in earnings. A further decline to 2.24 was observed in 2024, signaling a significantly reduced capacity to meet fixed obligations. A modest improvement occurred in 2025, with the ratio increasing to 3.12, but it remained substantially lower than the levels seen in 2021 and 2022. The trend suggests a weakening ability to comfortably cover fixed charges, particularly in 2024.
Overall, the analysis reveals a deterioration in the company’s ability to cover its fixed charges, driven primarily by declining earnings. While a slight improvement is evident in the most recent year, the coverage ratio remains considerably below its earlier levels, warranting continued monitoring.
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