Abbott Laboratories (ABT)

Abbott Laboratories is an American global pharmaceuticals and health care products company. It has 90,000 employees and operates in over 130 countries. The company headquarters are in Abbott Park, North Chicago, Illinois. The company was founded by Chicago physician Wallace Calvin Abbott in 1888. In 2010, Abbott had over $35 billion in revenue. In 1985, the company developed the first HIV blood-screening test. The company's drug portfolio includes Humira, a drug for rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn's disease, moderate to severe chronic psoriasis and juvenile idiopathic arthritis; Norvir, a treatment for HIV; Depakote, an anticonvulsant drug; and Synthroid, a synthetic thyroid hormone. Abbott also has a broad range of medical devices, diagnostics and immunoassay products as well as nutritional products, including Ensure, a line of meal replacement shakes; and EAS, the largest producer of performance-based nutritional supplements. Abbott Point-of-Care manufactures diagnostic products for blood analysis to provide health care professionals critical diagnostics information accurately and immediately at the point of patient care. Abbott also provides point -of-care cardiac assays to the emergency room.

Fundamental Analysis Current ratio

2.50 2.00 1.50 1.00 0.50 0.00 2012 2011 2010 2009 2.36 1.54 1.29 1.79

The Current Ratio of a company is measured by: Current Ratio = Current Assets/Current Liabilities The current ratio of Abbot Laborites (ABT) in the year 2012 was 2.36, which means the company has 2.36 times the current assets over their current liabilities. In 2009 the company had a poor CR ratio, but it has increased in the following years. It had its maximum CR ratio in 2012 which was 2.36.

Quick ratio
2.50 2.00 1.50 1.00 0.50 0.00 2012 2011 2010 2009 2.07 1.32 1.11 1.54

The Quick Ratio of a company is measured by: Quick Ratio/Acid Test Ratio = (Current Assets- Inventory)/Current Liabilities The Quick ratio of HSP in the year 2012 was 2.07.In 2011 the company had a poor quick ratio, but it has increased in the following year, meaning it has improved its liquidity position. It had its maximum QR ratio in 2012 which was 2.07.

Inventory Turnover Ratio

4.80 4.60 4.40 4.20 4.00 3.80 3.60 2012 2011 2010 2009 3.99 4.73 4.60 4.05

The Inventory Turnover of a company is measured by: Inventory Turnover = Cost of Goods Sold (COGS)/Inventory Inventory turnover ratio for ABT in 2012 was 3.99.From 2009 to 2012 the inventory turnover ratio was more or less the same. It means that they have efficiently managed to increase sales by increasing inventory.

Operating income return on investment (OIROI)

14% 12% 10% 8% 6% 4% 2% 0%

12%

10%

10%

12%

2012

2011

2010

2009

The Operating Income Return on Investment of a company is measured by: Operating Income Return on Investment (OIROI) = Operating Income/Total Asset In 2012 the OIROI was 12%. In both 2010 and 2011 it was 10%.It means that the company was able to generate more income on $1 of assets in 2009-10 then in 20011-2012. In 2009 it was 12%.

Operating profit margin

0.25 0.20 0.15 0.10 0.05 0.00 2012 2011 2010 2009 0.20 0.15 0.17 0.20

Operating Profit Margin of a company is measured by: Operating Profit Margin = (Operating Income/Sales)*100 In 2012, the operating profit margin for ABT was 0.20.In the four years the operating profit margin was more or less the same .It means the company was able to keep cost and expense relative to sales in those years. IN 2011 and 2010 it dipped a lot because operating was a bit low.

Total Asset Turnover

0.66 0.64 0.62 0.60 0.58 0.56 0.54 2012 2011 2010 2009 0.59 0.58 0.59 0.64

The Total Asset Turnover of a company is measured by: Total Asset Turnover = Sales/Total Asset In 2012 TATO for ABT was 0.67.From 2009 to 2012 the TATO was more or less the same. But it is below 1.It means that ABT moderately used its asset to generate sales.

Fixed asset turnover

6.00 5.00 4.00 3.00 2.00 1.00 0.00 2012 2011 2010 2009 4.95 4.93 4.41 4.04

The Fixed Asset Turnover Ratio of a company is measured by: Fixed Asset Turnover = Sales/Net Fixed Asset In 2012 fixed asset turnover ratio for ABT was 4.95.It was highest in 2012.It has stayed more or less same for the last four years. That means that ABT was successful to turn its fixed asset (property
& plants) to generate sales.

Debt Ratio
0.64 0.62 0.60 0.58 0.56 0.54 0.52 2012 2011 2010 2009 0.60 0.59 0.56 0.63

The Debt Ratio of a company is measured by: Debt Ratio = Total Debt/Total Asset

In 2012 debt ratio for ABT was 0.60.In 2010 it was the highest which was 0.63.Debt ratio for ABT is more or less the same in the last four years. But it is bit higher then 50%.It mean that they are most of their financing through debt.

Times Interest Earned

15.00 10.00 13.65 5.00 0.00 2012 2011 2010 2009 10.85 11.01 12.00

The Times Interest Earned of a company is measured by: Times Interest Earned = Operating Income/Interest Expense In 2012 times interest earned for ABT was 13.65 which was their highest in four year. In all the four years starting from 2009 they had times interest earned more than 10 which suggest that they had a steady operating income in all those four years.

Return on equity
0.30 0.25 0.20 0.15 0.10 0.05 0.00 2012 2011 2010 2009 0.22 0.19 0.20 0.25

The Return on Equity of a company is measured by: Return on Equity = (Net Income/Common Equity)*100% In 2012 ABT had a ROE of about 0.22.They had their highest ROE in 2009 which was about 0.25.They had a steady ROE in the last four years. So we can say that like their operating income their net income is also very stable.

EPS (Earning per share)

6.00 5.00 4.00 3.00 2.00 1.00 0.00

5.07

4.66

4.17

3.72

2012

2011

2010

2009

The Earnings per Share is measured by: Earnings per Share (EPS) = Net Income/Total no. of Share Outstanding In 2012 they had a EPS of 5.07, which was their highest in 4 years. If we look at the trend of their EPS, we will see that they have an increasing trend of EPS. It only confirms that their Net income is growing day by day and their business operations is expending.

P/E Ratio
20.00 15.00 10.00 5.00 0.00 2012 2011 2010 2009 9.24 18.67 15.68 14.69

The Price to Earnings Ratio of a company is measured by: Price to Earning (P/E) Ratio = Market Price per Share/EPS In 2012 ABT had a P/E ratio of about 9.24, which was their lowest in four years. In the previous four years they had very high P/E ratio. But in 2012 their P/E ratio dipped and came down to 9.24.One key reason behind is the fall of their market price per share. They had a fall on their market price because of some controversial managerial decisions.