private.Abbott Labs as seen in Visual Finance

Abbott Labs is often thought of as one of the classic Big Pharma companies, and its structure appears to bear this out (note: 2010 Annual Report information):

• Very profitable, at 13% Return On Sales - though the comparatively high Assets reduce its Return On Assets to less than 8%.
• Very high R&D spend: some 11% of Sales Revenue is plowed straight back into developing new product.
• Slow-paying customers, at 75 Days Sales Outstanding
• Debt under control
• And the largest Asset item is Goodwill - reflecting aggressive expansion through strategic acquisitions.

At a glance, a perfectly healthy drug company - however, what you don't see in this view is that Abbott doesn't even consider itself as a "pharmaceutical" company any longer, but as belonging to the wider "medical" field. And this is what a lot of both its R&D and its acquisitions have focused on.

Abbott Labs is in a state of transition, not out of desperation as can sometimes be the case, but driven by a strategic vision; and the results are good.

(Andromeda Training is proud to have been providing business acumen training for Abbott Labs in the US, UK and Ireland, using the Income/Outcome simulation.

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