Abbott Laboratories

Paper Summary:

This paper examines the 2006 financial status of Abbott Laboratories based on an analysis of their liquidity, solvency, profitability and asset management ratios. These financial ratios show that Abbot has solid financial policies, despite a significant increase in short-term borrowings in 2006. The paper indicates that some of the ratios show that company profitability or asset utilization has decreased at Abbott from 2004 to 2006; however, this is most likely a short-term effect of the company's strategic reorganization to target its core business sectors and of the purchases and acquisitions that have not yet had the time to show their profitability. The paper includes formulas and chart.

Table of Contents:
Introduction
Liquidity Ratios
Solvency Ratios
Profitability Ratios
Asset Management Ratios
Conclusions

From the Paper:

"In our opinion, it is not something to be concerned about, since the current ratio figure in 2006 is still around the value of 1, showing that the company currently has no difficulties in covering its short-term liabilities. Nevertheless, this is something that needs to be kept under observation in the subsequent period of time, so as not to become uncontrolled. The company's policies of reducing debts show that this is a priority under observation for the company's management."

Sample of Sources Used:

• 2006 Abbott Annual Report http://www.abbott.com/static/content/microsite/annual_report/2006/index.html
• ACCA - the Association of Chartered Certified Accountants (2004), "Financial Management & Control", 4th Edition, BPP Professional Education.
• Halpern, Paul, Weston, Fred, Brigham, Eugene. Canadian Managerial Finance. Harcourt Brace; 3rd Canada edition. June 1989.
• Investopedia - http://www.investopedia.com. Last retrieved on February 15, 2007

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