Stock Analysis on Net

Abbott Laboratories (NYSE:ABT) 

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Abbott Laboratories, income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Domestic 497 528 1,309 859 39
Foreign 1,075 874 723 790 566
Current 1,572 1,402 2,032 1,649 605
Domestic (459) (382) (610) (355) (18)
Foreign (7,502) (79) (49) (154) (90)
Deferred (7,961) (461) (659) (509) (108)
Taxes on earnings from continuing operations (6,389) 941 1,373 1,140 497

Based on: 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), 10-K (reporting date: 2020-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Abbott Laboratories current decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Abbott Laboratories deferred increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.
Taxes on earnings from continuing operations Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Abbott Laboratories taxes on earnings from continuing operations decreased from 2022 to 2023 and from 2023 to 2024.

Effective Income Tax Rate (EITR)

Abbott Laboratories, effective income tax rate (EITR) reconciliation

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Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Statutory tax rate on earnings from continuing operations 21.00% 21.00% 21.00% 21.00% 21.00%
Impact of foreign operations -1.80% -3.60% -2.50% -3.90% -3.30%
Foreign-derived intangible income benefit -2.30% -2.20% -2.00% -1.10% -1.00%
Valuation allowance adjustments -107.10% 0.00% 0.00% 0.00% 0.00%
Domestic impairment loss 0.00% 0.00% 0.00% -0.10% -2.70%
Excess tax benefits related to stock compensation -0.70% -0.30% -0.50% -1.70% -1.90%
Research tax credit -1.00% -1.10% -0.90% -0.60% -1.00%
Resolution of certain tax positions pertaining to prior years 0.40% 1.20% 0.20% -0.70% -2.80%
Intercompany restructurings and integration 0.20% -1.40% 0.00% 0.10% 0.50%
State taxes, net of federal benefit 0.30% 0.50% 0.70% 0.40% 0.50%
All other, net -0.10% 0.00% 0.50% 0.50% 0.20%
Effective tax rate on earnings from continuing operations, before impact of TCJA and other related items -91.10% 14.10% 16.50% 13.90% 9.50%
Impact of TCJA and other related items 0.00% 0.00% 0.00% 0.00% 0.50%
Effective tax rate on earnings from continuing operations -91.10% 14.10% 16.50% 13.90% 10.00%

Based on: 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), 10-K (reporting date: 2020-12-31).

Item Description The company
Effective tax rate on earnings from continuing operations, before impact of TCJA and other related items Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Abbott Laboratories effective tax rate on earnings from continuing operations, before impact of TCJA and other related items decreased from 2022 to 2023 and from 2023 to 2024.

Components of Deferred Tax Assets and Liabilities

Abbott Laboratories, components of deferred tax assets and liabilities

US$ in millions

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Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Compensation and employee benefits 89 230 618 1,003
Trade receivable reserves 230 221 227 206 196
Research and development costs 773 568 319
Inventory reserves 168 198 187 169 146
Lease liabilities 265 272 263 273 259
Deferred intercompany profit 284 283 260 261 254
NOLs, reserves not currently deductible, credit carryforwards and other 10,353 9,922 2,402 2,425 2,383
Deferred tax assets before valuation allowance 12,073 11,553 3,888 3,952 4,241
Valuation allowance (1,664) (8,690) (1,169) (1,180) (1,060)
Deferred tax assets 10,409 2,863 2,719 2,772 3,181
Compensation and employee benefits (276)
Depreciation (408) (414) (376) (330) (297)
Right of Use lease assets (249) (258) (252) (264) (251)
Other, primarily the excess of book basis over tax basis of intangible assets (1,365) (1,777) (2,038) (2,364) (2,876)
Deferred tax liabilities (2,298) (2,449) (2,666) (2,958) (3,424)
Net deferred tax assets (liabilities) 8,111 414 53 (186) (243)

Based on: 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), 10-K (reporting date: 2020-12-31).

Item Description The company
Deferred tax assets before valuation allowance Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Abbott Laboratories deferred tax assets before valuation allowance increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Abbott Laboratories deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Abbott Laboratories net deferred tax assets (liabilities) increased from 2022 to 2023 and from 2023 to 2024.

Deferred Tax Assets and Liabilities, Classification

Abbott Laboratories, deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Deferred tax assets 8,623 982 1,044 1,206 1,163
Deferred tax liabilities 512 568 991 1,392 1,406

Based on: 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), 10-K (reporting date: 2020-12-31).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Abbott Laboratories deferred tax assets decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Abbott Laboratories deferred tax liabilities decreased from 2022 to 2023 and from 2023 to 2024.

Adjustments to Financial Statements: Removal of Deferred Taxes

Abbott Laboratories, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported) 81,414 73,214 74,438 75,196 72,548
Less: Noncurrent deferred tax assets, net 8,623 982 1,044 1,206 1,163
Total assets (adjusted) 72,791 72,232 73,394 73,990 71,385
Adjustment to Total Liabilities
Total liabilities (as reported) 33,513 34,387 37,533 39,172 39,545
Less: Noncurrent deferred tax liabilities, net 512 568 991 1,392 1,406
Total liabilities (adjusted) 33,001 33,819 36,542 37,780 38,139
Adjustment to Total Abbott Shareholders’ Investment
Total Abbott shareholders’ investment (as reported) 47,664 38,603 36,686 35,802 32,784
Less: Net deferred tax assets (liabilities) 8,111 414 53 (186) (243)
Total Abbott shareholders’ investment (adjusted) 39,553 38,189 36,633 35,988 33,027
Adjustment to Net Earnings
Net earnings (as reported) 13,402 5,723 6,933 7,071 4,495
Add: Deferred income tax expense (benefit) (7,961) (461) (659) (509) (108)
Net earnings (adjusted) 5,441 5,262 6,274 6,562 4,387

Based on: 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), 10-K (reporting date: 2020-12-31).


Abbott Laboratories, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Abbott Laboratories, adjusted financial ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net Profit Margin
Reported net profit margin 31.95% 14.27% 15.88% 16.42% 12.99%
Adjusted net profit margin 12.97% 13.12% 14.37% 15.23% 12.68%
Total Asset Turnover
Reported total asset turnover 0.52 0.55 0.59 0.57 0.48
Adjusted total asset turnover 0.58 0.56 0.59 0.58 0.48
Financial Leverage
Reported financial leverage 1.71 1.90 2.03 2.10 2.21
Adjusted financial leverage 1.84 1.89 2.00 2.06 2.16
Return on Equity (ROE)
Reported ROE 28.12% 14.83% 18.90% 19.75% 13.71%
Adjusted ROE 13.76% 13.78% 17.13% 18.23% 13.28%
Return on Assets (ROA)
Reported ROA 16.46% 7.82% 9.31% 9.40% 6.20%
Adjusted ROA 7.47% 7.28% 8.55% 8.87% 6.15%

Based on: 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), 10-K (reporting date: 2020-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Abbott Laboratories adjusted net profit margin ratio deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Abbott Laboratories adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Abbott Laboratories adjusted financial leverage ratio decreased from 2022 to 2023 and from 2023 to 2024.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Abbott Laboratories adjusted ROE deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Abbott Laboratories adjusted ROA deteriorated from 2022 to 2023 but then slightly improved from 2023 to 2024.

Abbott Laboratories, Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 13,402 5,723 6,933 7,071 4,495
Net sales 41,950 40,109 43,653 43,075 34,608
Profitability Ratio
Net profit margin1 31.95% 14.27% 15.88% 16.42% 12.99%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 5,441 5,262 6,274 6,562 4,387
Net sales 41,950 40,109 43,653 43,075 34,608
Profitability Ratio
Adjusted net profit margin2 12.97% 13.12% 14.37% 15.23% 12.68%

Based on: 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), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × 13,402 ÷ 41,950 = 31.95%

2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Net sales
= 100 × 5,441 ÷ 41,950 = 12.97%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Abbott Laboratories adjusted net profit margin ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

Adjusted Total Asset Turnover

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Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net sales 41,950 40,109 43,653 43,075 34,608
Total assets 81,414 73,214 74,438 75,196 72,548
Activity Ratio
Total asset turnover1 0.52 0.55 0.59 0.57 0.48
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 41,950 40,109 43,653 43,075 34,608
Adjusted total assets 72,791 72,232 73,394 73,990 71,385
Activity Ratio
Adjusted total asset turnover2 0.58 0.56 0.59 0.58 0.48

Based on: 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), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 41,950 ÷ 81,414 = 0.52

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 41,950 ÷ 72,791 = 0.58

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Abbott Laboratories adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Total assets 81,414 73,214 74,438 75,196 72,548
Total Abbott shareholders’ investment 47,664 38,603 36,686 35,802 32,784
Solvency Ratio
Financial leverage1 1.71 1.90 2.03 2.10 2.21
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 72,791 72,232 73,394 73,990 71,385
Adjusted total Abbott shareholders’ investment 39,553 38,189 36,633 35,988 33,027
Solvency Ratio
Adjusted financial leverage2 1.84 1.89 2.00 2.06 2.16

Based on: 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), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Financial leverage = Total assets ÷ Total Abbott shareholders’ investment
= 81,414 ÷ 47,664 = 1.71

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Abbott shareholders’ investment
= 72,791 ÷ 39,553 = 1.84

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Abbott Laboratories adjusted financial leverage ratio decreased from 2022 to 2023 and from 2023 to 2024.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 13,402 5,723 6,933 7,071 4,495
Total Abbott shareholders’ investment 47,664 38,603 36,686 35,802 32,784
Profitability Ratio
ROE1 28.12% 14.83% 18.90% 19.75% 13.71%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 5,441 5,262 6,274 6,562 4,387
Adjusted total Abbott shareholders’ investment 39,553 38,189 36,633 35,988 33,027
Profitability Ratio
Adjusted ROE2 13.76% 13.78% 17.13% 18.23% 13.28%

Based on: 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), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 ROE = 100 × Net earnings ÷ Total Abbott shareholders’ investment
= 100 × 13,402 ÷ 47,664 = 28.12%

2 Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted total Abbott shareholders’ investment
= 100 × 5,441 ÷ 39,553 = 13.76%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Abbott Laboratories adjusted ROE deteriorated from 2022 to 2023 and from 2023 to 2024.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net earnings 13,402 5,723 6,933 7,071 4,495
Total assets 81,414 73,214 74,438 75,196 72,548
Profitability Ratio
ROA1 16.46% 7.82% 9.31% 9.40% 6.20%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 5,441 5,262 6,274 6,562 4,387
Adjusted total assets 72,791 72,232 73,394 73,990 71,385
Profitability Ratio
Adjusted ROA2 7.47% 7.28% 8.55% 8.87% 6.15%

Based on: 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), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 13,402 ÷ 81,414 = 16.46%

2 Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × 5,441 ÷ 72,791 = 7.47%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Abbott Laboratories adjusted ROA deteriorated from 2022 to 2023 but then slightly improved from 2023 to 2024.