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ABT (Abbott Laboratories) Altman Z-Score : 5.31 (As of Oct. 31, 2024)


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What is Abbott Laboratories Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Good Sign:

Altman Z-score of 5.33 is strong.

Abbott Laboratories has a Altman Z-Score of 5.31, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Abbott Laboratories's Altman Z-Score or its related term are showing as below:

ABT' s Altman Z-Score Range Over the Past 10 Years
Min: 2.33   Med: 3.77   Max: 5.52
Current: 5.33

During the past 13 years, Abbott Laboratories's highest Altman Z-Score was 5.52. The lowest was 2.33. And the median was 3.77.


Abbott Laboratories Altman Z-Score Historical Data

The historical data trend for Abbott Laboratories's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Abbott Laboratories Altman Z-Score Chart

Abbott Laboratories Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 3.83 4.34 5.52 4.85 5.07

Abbott Laboratories Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.68 5.07 5.30 5.00 -

Competitive Comparison of Abbott Laboratories's Altman Z-Score

For the Medical Devices subindustry, Abbott Laboratories's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Abbott Laboratories's Altman Z-Score Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, Abbott Laboratories's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Abbott Laboratories's Altman Z-Score falls into.



Abbott Laboratories Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Abbott Laboratories's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.1282+1.4*0.5253+3.3*0.0973+0.6*5.8957+1.0*0.5645
=5.31

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Jun. 2024:
Total Assets was $73,017 Mil.
Total Current Assets was $23,119 Mil.
Total Current Liabilities was $13,760 Mil.
Retained Earnings was $38,354 Mil.
Pre-Tax Income was 1940 + 1607 + 1436 + 1795 = $6,778 Mil.
Interest Expense was -51 + -58 + -61 + -159 = $-329 Mil.
Revenue was 10635 + 10377 + 9964 + 10241 = $41,217 Mil.
Market Cap (Today) was $197,252 Mil.
Total Liabilities was $33,457 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(23119 - 13760)/73017
=0.1282

X2=Retained Earnings/Total Assets
=38354/73017
=0.5253

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(6778 - -329)/73017
=0.0973

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=197252.121/33457
=5.8957

X5=Revenue/Total Assets
=41217/73017
=0.5645

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Abbott Laboratories has a Altman Z-Score of 5.31 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Abbott Laboratories  (NYSE:ABT) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Abbott Laboratories Altman Z-Score Related Terms

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Abbott Laboratories Business Description

Address
100 Abbott Park Road, Abbott Park, IL, USA, 60064-6400
Abbott manufactures and markets cardiovascular and diabetes devices, adult and pediatric nutritional products, diagnostic equipment and testing kits, and branded generic drugs. Products include pacemakers, implantable cardioverter defibrillators, neuromodulation devices, coronary stents, catheters, infant formula, nutritional liquids for adults, continuous glucose monitors, and immunoassays and point-of-care diagnostic equipment. Abbott derives approximately 60% of sales outside the United States.
Executives
Robert B Ford officer: Senior Vice President 100 ABBOTT PARK ROAD, AP6A-2, D-032L, ABBOTT PARK IL 60064-6092
Mccoy John A. Jr. officer: VICE PRESIDENT C/O ABBOTT LABORATORIES, 100 ABBOTT PARK ROAD, ABBOTT PARK IL 60064
Robert E Funck officer: Vice President, Controller 100 ABBOTT PARK ROAD, D-378, AP6D-2, ABBOTT PARK IL 60064-6092
Lisa D Earnhardt officer: Executive Vice President 1555 ADAMS DRIVE, C/O INTERSECT ENT, INC., MENLO PARK CA 94025
Salvadori Daniel Gesua Sive officer: Senior Vice President 100 ABBOTT PARK ROAD, AP6A-2, D-032L, ABBOTT PARK IL 60064-6092
Mary K Moreland officer: Executive Vice President 100 ABBOTT PARK ROAD, ABBOTT PARK IL 60064
Hubert L Allen officer: Executive Vice President 100 ABBOTT PARK ROAD, AP6C-1N, ABBOTT PARK IL 60064-6092
Louis H. Morrone officer: EXECUTIVE VICE PRESIDENT 100 ABBOTT PARK ROAD, ABBOTT PARK IL 60064
Andrea F Wainer officer: Executive Vice President 100 ABBOTT PARK ROAD, ABBOTT PARK IL 60064
Daniel J Starks director ONE ST JUDE MEDICAL DRIVE, ST PAUL MN 55117
Michael F Roman director 3M COMPANY OFFICE OF GENERAL COUNSEL, 3M CENTER, ST. PAUL MN 55144-1000
Patricia Paola Gonzalez director 100 ABBOTT PARK ROAD, ABBOTT PARK IL 60064
Philip P Boudreau officer: Vice President 100 ABBOTT PARK ROAD, ABBOTT PARK IL 60064
Michael O'grady director 50 S LASALLE STREET, CHICAGO IL 60603
Gregory A Ahlberg officer: Senior Vice President 100 ABBOTT PARK ROAD, ABBOTT PARK IL 60064