Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Abbott Laboratories, liquidity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.58 | 1.67 | 1.64 | 1.63 | 1.85 | |
| Quick ratio | 1.02 | 1.05 | 1.00 | 1.06 | 1.28 | |
| Cash ratio | 0.54 | 0.56 | 0.53 | 0.66 | 0.78 |
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 liquidity position, as indicated by the assessed ratios, demonstrates a generally declining trend over the five-year period. While the company maintains liquidity, the observed movements suggest a decreasing ability to meet short-term obligations with its most liquid assets.
- Current Ratio
- The current ratio experienced a decrease from 1.85 in 2021 to 1.58 in 2025. This indicates a reduction in the company’s ability to cover its current liabilities with current assets. The decline was most pronounced between 2021 and 2022, followed by a period of relative stability before a final decrease in 2025. Values fluctuated between 1.63 and 1.67 from 2022 to 2024.
- Quick Ratio
- The quick ratio, which excludes inventory from current assets, shows a more substantial decline than the current ratio. It decreased from 1.28 in 2021 to 1.02 in 2025. This suggests a weakening ability to meet short-term obligations without relying on the sale of inventory. The ratio hit its lowest point in 2023 at 1.00, and experienced a slight recovery in 2024 before decreasing again in 2025.
- Cash Ratio
- The cash ratio, the most conservative liquidity measure, consistently decreased throughout the period, moving from 0.78 in 2021 to 0.54 in 2025. This indicates a diminishing capacity to cover immediate liabilities with cash and cash equivalents. The rate of decline slowed between 2023 and 2024, but continued downward in the final year.
Collectively, these ratios suggest a consistent, albeit gradual, erosion of the company’s liquidity position. The decreasing trends across all three ratios warrant further investigation into the underlying causes, such as changes in working capital management, asset utilization, or debt levels.
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Current Ratio
Abbott Laboratories, current ratio 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) | ||||||
| Current assets | 25,996) | 23,656) | 22,670) | 25,224) | 24,239) | |
| Current liabilities | 16,496) | 14,157) | 13,841) | 15,489) | 13,105) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.58 | 1.67 | 1.64 | 1.63 | 1.85 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Elevance Health Inc. | 1.54 | 1.45 | 1.44 | 1.40 | 1.47 | |
| Intuitive Surgical Inc. | 4.87 | 4.07 | 4.76 | 4.40 | 5.08 | |
| Medtronic PLC | 1.85 | 2.03 | 2.39 | 1.86 | 2.65 | |
| UnitedHealth Group Inc. | 0.79 | 0.83 | 0.79 | 0.77 | 0.79 | |
| Current Ratio, Sector | ||||||
| Health Care Equipment & Services | 1.14 | 1.15 | 1.15 | 1.13 | 1.22 | |
| Current Ratio, Industry | ||||||
| Health Care | 1.23 | 1.21 | 1.23 | 1.23 | 1.31 | |
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
Current ratio = Current assets ÷ Current liabilities
= 25,996 ÷ 16,496 = 1.58
2 Click competitor name to see calculations.
The current ratio exhibited a generally stable pattern over the five-year period, with some fluctuation. Initial values indicate a relatively healthy liquidity position, which subsequently experienced a slight decline before stabilizing and showing a minor decrease in the most recent year.
- Current Ratio Trend
- The current ratio began at 1.85 in 2021. A decrease was observed in 2022, falling to 1.63. The ratio then showed modest improvement in 2023 and 2024, reaching 1.64 and 1.67 respectively. In 2025, the current ratio decreased slightly to 1.58.
The fluctuations in the current ratio appear to be driven by a combination of changes in current assets and current liabilities. While current assets experienced an initial increase followed by a decrease and subsequent recovery, current liabilities consistently increased throughout the period, contributing to the observed ratio dynamics.
- Asset and Liability Relationship
- Current assets peaked at US$25,224 million in 2022 before declining to US$22,670 million in 2023. They then recovered to US$23,656 million in 2024 and further to US$25,996 million in 2025. Current liabilities demonstrated a consistent upward trend, increasing from US$13,105 million in 2021 to US$16,496 million in 2025.
Despite the fluctuations, the current ratio remained above 1.5 throughout the period, suggesting the entity generally maintained sufficient current assets to cover its current liabilities. However, the slight decrease in the most recent year warrants continued monitoring to ensure liquidity remains at acceptable levels.
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Quick Ratio
Abbott Laboratories, quick ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 8,522) | 7,616) | 6,896) | 9,882) | 9,799) | |
| Investments, primarily bank time deposits and U.S. treasury bills | 417) | 351) | 383) | 288) | 450) | |
| Trade receivables, less allowances | 7,929) | 6,925) | 6,565) | 6,218) | 6,487) | |
| Total quick assets | 16,868) | 14,892) | 13,844) | 16,388) | 16,736) | |
| Current liabilities | 16,496) | 14,157) | 13,841) | 15,489) | 13,105) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 1.02 | 1.05 | 1.00 | 1.06 | 1.28 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Elevance Health Inc. | 1.41 | 1.32 | 1.30 | 1.27 | 1.33 | |
| Intuitive Surgical Inc. | 3.72 | 3.00 | 3.83 | 3.56 | 4.34 | |
| Medtronic PLC | 1.20 | 1.31 | 1.54 | 1.30 | 1.91 | |
| UnitedHealth Group Inc. | 0.70 | 0.75 | 0.73 | 0.70 | 0.72 | |
| Quick Ratio, Sector | ||||||
| Health Care Equipment & Services | 0.95 | 0.97 | 0.97 | 0.95 | 1.04 | |
| Quick Ratio, Industry | ||||||
| Health Care | 0.88 | 0.88 | 0.90 | 0.93 | 1.00 | |
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
Quick ratio = Total quick assets ÷ Current liabilities
= 16,868 ÷ 16,496 = 1.02
2 Click competitor name to see calculations.
The quick ratio experienced fluctuations over the five-year period. Initially, the ratio demonstrated a decline followed by a period of stabilization and a slight recovery. A review of the underlying components reveals insights into these movements.
- Overall Trend
- The quick ratio decreased from 1.28 in 2021 to 1.00 in 2023, representing a substantial reduction in the company’s ability to meet its short-term obligations with its most liquid assets. Subsequently, the ratio showed modest improvement, reaching 1.05 in 2024 and 1.02 in 2025, but remained below the initial level.
- Quick Asset Movement
- Total quick assets decreased from US$16,736 million in 2021 to US$13,844 million in 2023. This decline contributed significantly to the initial decrease in the quick ratio. A partial recovery was observed in 2024 and 2025, with quick assets rising to US$14,892 million and US$16,868 million respectively, though not fully offsetting the earlier reduction.
- Current Liability Movement
- Current liabilities increased from US$13,105 million in 2021 to US$15,489 million in 2022, further exacerbating the decline in the quick ratio. Following 2022, current liabilities decreased slightly to US$13,841 million in 2023, but then increased again, reaching US$16,496 million in 2025. This consistent upward pressure on current liabilities partially offset the recovery in quick assets.
- Ratio Interaction
- The combined effect of decreasing quick assets and increasing current liabilities between 2021 and 2023 resulted in the most significant reduction in the quick ratio. The subsequent stabilization and slight improvement in the ratio from 2024 to 2025 suggest a balancing of these forces, with growth in quick assets partially mitigating the continued rise in current liabilities.
The quick ratio remained above 1.0 for the entire period, indicating that the company generally possesses sufficient liquid assets to cover its immediate liabilities. However, the trend towards a lower ratio warrants continued monitoring.
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Cash Ratio
Abbott Laboratories, cash ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 8,522) | 7,616) | 6,896) | 9,882) | 9,799) | |
| Investments, primarily bank time deposits and U.S. treasury bills | 417) | 351) | 383) | 288) | 450) | |
| Total cash assets | 8,939) | 7,967) | 7,279) | 10,170) | 10,249) | |
| Current liabilities | 16,496) | 14,157) | 13,841) | 15,489) | 13,105) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.54 | 0.56 | 0.53 | 0.66 | 0.78 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Elevance Health Inc. | 0.88 | 0.85 | 0.87 | 0.86 | 0.95 | |
| Intuitive Surgical Inc. | 2.96 | 2.30 | 3.15 | 2.90 | 3.66 | |
| Medtronic PLC | 0.70 | 0.74 | 0.88 | 0.85 | 1.27 | |
| UnitedHealth Group Inc. | 0.24 | 0.28 | 0.34 | 0.36 | 0.36 | |
| Cash Ratio, Sector | ||||||
| Health Care Equipment & Services | 0.47 | 0.49 | 0.55 | 0.58 | 0.64 | |
| Cash Ratio, Industry | ||||||
| Health Care | 0.43 | 0.46 | 0.50 | 0.54 | 0.60 | |
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
Cash ratio = Total cash assets ÷ Current liabilities
= 8,939 ÷ 16,496 = 0.54
2 Click competitor name to see calculations.
The cash ratio decreased over the five-year period, exhibiting fluctuations along the way. While a slight recovery is noted in the latter years, the overall trend indicates a diminishing ability to cover current liabilities with immediately available cash.
- Cash Ratio Trend
- The cash ratio began at 0.78 in 2021 and declined to 0.53 in 2023. A modest increase to 0.56 was observed in 2024, followed by a further slight increase to 0.54 in 2025. This suggests a period of weakening short-term liquidity, followed by stabilization at a lower level.
- Total Cash Assets
- Total cash assets decreased from US$10,249 million in 2021 to US$7,279 million in 2023, representing a substantial reduction. Cash assets then increased to US$7,967 million in 2024 and further to US$8,939 million in 2025, indicating a partial recovery in cash holdings.
- Current Liabilities
- Current liabilities increased from US$13,105 million in 2021 to US$15,489 million in 2022. They subsequently decreased to US$13,841 million in 2023, before rising again to US$14,157 million in 2024 and US$16,496 million in 2025. The increasing trend in current liabilities, particularly in the final year, contributes to the declining cash ratio despite the recovery in cash assets.
The combination of decreasing cash assets between 2021 and 2023, and increasing current liabilities, primarily drove the initial decline in the cash ratio. The subsequent increases in cash assets, while positive, have not been sufficient to fully offset the rise in current liabilities, resulting in a stabilized, but lower, cash ratio in the most recent periods.
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