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Abbott Laboratories’ Consolidated Statements of Earnings for the 3 fiscal year’s ending December 31, 2019.   Required: Using the attached earnings statement, for each period presented, Compute the gross margin % Note: Gross margin % = [(Net sales – Cost of products sold)/Net sales] x 100 Compute the net profit margin on sales % Note: Net profit margin % = (Net earnings/Net sales) x 100 Considering the 3-year trend for a. and b. above, provide a brief comment about the company’s performance for: Gross margin % and Net profit margin %.

Abbott Laboratories’ Consolidated Statements of Earnings for the 3 fiscal year’s ending December 31, 2019.   Required: Using the attached earnings statement, for each period presented, Compute the gross margin % Note: Gross margin % = [(Net sales – Cost of products sold)/Net sales] x 100 Compute the net profit margin on sales % Note: Net profit margin % = (Net earnings/Net sales) x 100 Considering the 3-year trend for a. and b. above, provide a brief comment about the company’s performance for: Gross margin % and Net profit margin %.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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 Abbott Laboratories’ Consolidated Statements of Earnings for the 3 fiscal year’s ending December 31, 2019.

 

Required: Using the attached earnings statement, for each period presented,

  1. Compute the gross margin %

Note: Gross margin % = [(Net sales – Cost of products sold)/Net sales] x 100

  1. Compute the net profit margin on sales %

Note: Net profit margin % = (Net earnings/Net sales) x 100

  1. Considering the 3-year trend for a. and b. above, provide a brief comment about the company’s performance for:
  2. Gross margin % and
  3. Net profit margin %.
Abbott Laboratories and Subsidiaries Consolidated Statement of Earnings (in millions except per share data) Year Ended December 31 2019 2018 2017 Net Sales $ 31,904 $ 30,578 $ 27,390 Cost of products sold, excluding amortization of intangible assets Amortization of intangible assets Research and development Selling, general and administrative Total Operating Cost and Expenses Operating Earnings Interest expense 13,231 1,936 2,440 9,765 12,706 2,178 2,300 9,744 12,409 1,975 2,260 9,182 27,372 4,532 670 26,928 25,826 3,650 1,564 826 904 (105) 28 (124) (34) Interest income (94) Net foreign exchange (gain) loss Debt extinguishment costs Other (income) expense, net Earnings from Continuing Operations Before Taxes Taxes on Earnings from Continuing Operations 7 63 167 (191) 4,077 (139) 2,873 (1,413) 2,231 390 539 1,878 Earnings from Continuing Operations 3,687 2,334 353 Net Earnings from Discontinued Operations, net of taxes 34 124 Net Earnings $ 3,687 $ 2,368 $ 477 Basic Earnings Per Common Share -- Continuing Operations Discontinued Operations Net Earnings $ 2.07 $ 1.32 $ 0.20 0.02 0.07 2$ 2.07 2$ 1.34 $ 0.27 Diluted Earnings Per Common Share -- Continuing Operations Discontinued Operations Net Earnings $ 2.06 $ 1.31 $ 0.20 0.02 0.07 2$ 2.06 $ 1.33 $ 0.27 Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share Dilutive Common Stock Options Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options 1,768 1,758 1,740 13 12 9. 1,781 1,770 1,749 Outstanding Common Stock Options Having No Dilutive Effect 61 The accompanying notes to consolidated financial statements are an integral part of this statement.
Transcribed Image Text:Abbott Laboratories and Subsidiaries Consolidated Statement of Earnings (in millions except per share data) Year Ended December 31 2019 2018 2017 Net Sales $ 31,904 $ 30,578 $ 27,390 Cost of products sold, excluding amortization of intangible assets Amortization of intangible assets Research and development Selling, general and administrative Total Operating Cost and Expenses Operating Earnings Interest expense 13,231 1,936 2,440 9,765 12,706 2,178 2,300 9,744 12,409 1,975 2,260 9,182 27,372 4,532 670 26,928 25,826 3,650 1,564 826 904 (105) 28 (124) (34) Interest income (94) Net foreign exchange (gain) loss Debt extinguishment costs Other (income) expense, net Earnings from Continuing Operations Before Taxes Taxes on Earnings from Continuing Operations 7 63 167 (191) 4,077 (139) 2,873 (1,413) 2,231 390 539 1,878 Earnings from Continuing Operations 3,687 2,334 353 Net Earnings from Discontinued Operations, net of taxes 34 124 Net Earnings $ 3,687 $ 2,368 $ 477 Basic Earnings Per Common Share -- Continuing Operations Discontinued Operations Net Earnings $ 2.07 $ 1.32 $ 0.20 0.02 0.07 2$ 2.07 2$ 1.34 $ 0.27 Diluted Earnings Per Common Share -- Continuing Operations Discontinued Operations Net Earnings $ 2.06 $ 1.31 $ 0.20 0.02 0.07 2$ 2.06 $ 1.33 $ 0.27 Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share Dilutive Common Stock Options Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options 1,768 1,758 1,740 13 12 9. 1,781 1,770 1,749 Outstanding Common Stock Options Having No Dilutive Effect 61 The accompanying notes to consolidated financial statements are an integral part of this statement.
Abbott Laboratories and Subsidiaries Consolidated Balance Sheet (dollars in millions) December 31 2019 2018 Assets Current assets: Cash and cash equivalents Investments, primarily bank time deposits and U.S. treasury bills Trade receivables, less allowances of-2019: $384; 2018: $314 $ 3,860 2$ 3,844 280 242 5,425 5,182 Inventories: Finished products Work in process 2,784 2,407 560 499 Materials 972 890 Total inventories 4,316 3,796 Other prepaid expenses and receivables Total current assets 1,786 1,568 15,667 14,632 Investments 883 897 Property and equipment, at cost: Land 519 501 Buildings Equipment Construction in progress 3,555 10,756 3,702 11,468 1,110 894 15,706 8,143 16,799 Less: accumulated depreciation and amortization Net property and equipment Intangible assets, net of amortization Goodwill 8,761 8,038 7,563 17,025 23,195 3,079 18,942 23,254 1,885 Deferred income taxes and other assets $ 67,887 $ 67,173 Liabilities and Shareholders' Investment Current liabilities: Short-term borrowings Trade accounts payable Salaries, wages and commissions Other accrued liabilities 2$ 201 200 3,252 1,237 4,035 2,975 1,182 3,780 Dividends payable Income taxes payable Current portion of long-term debt 635 563 226 305 1,277 7 Total current liabilities 10,863 9,012 Long-term debt Post-employment obligations and other long-term liabilities Commitments and contingencies Shareholders' investment: 16,661 9,062 19,359 8,080 Preferred shares, one dollar par value Authorized – 1,000,000 shares, none issued Common shares, without par value Authorized – 2,400,000,000 shares Issued at stated capital amount – Shares: 2019: 1,976,855,085; 2018: 1,971,189,465 Common shares held in treasury, at cost -Shares: 2019: 214,351,838; 2018: 215,570,043 Earnings employed in the business Accumulated other comprehensive income (loss) 23,853 23,512 (10,147) 25,847 (9,962) 24,560 (7,586) (8,465) Total Abbott Shareholders' Investment 31,088 30,524 Noncontrolling interests in subsidiaries 213 198 Total Shareholders' Investment 31,301 30,722 2$ 67,887 $ 67,173 The accompanying notes to consolidated financial statements are an integral part of this statement.
Transcribed Image Text:Abbott Laboratories and Subsidiaries Consolidated Balance Sheet (dollars in millions) December 31 2019 2018 Assets Current assets: Cash and cash equivalents Investments, primarily bank time deposits and U.S. treasury bills Trade receivables, less allowances of-2019: $384; 2018: $314 $ 3,860 2$ 3,844 280 242 5,425 5,182 Inventories: Finished products Work in process 2,784 2,407 560 499 Materials 972 890 Total inventories 4,316 3,796 Other prepaid expenses and receivables Total current assets 1,786 1,568 15,667 14,632 Investments 883 897 Property and equipment, at cost: Land 519 501 Buildings Equipment Construction in progress 3,555 10,756 3,702 11,468 1,110 894 15,706 8,143 16,799 Less: accumulated depreciation and amortization Net property and equipment Intangible assets, net of amortization Goodwill 8,761 8,038 7,563 17,025 23,195 3,079 18,942 23,254 1,885 Deferred income taxes and other assets $ 67,887 $ 67,173 Liabilities and Shareholders' Investment Current liabilities: Short-term borrowings Trade accounts payable Salaries, wages and commissions Other accrued liabilities 2$ 201 200 3,252 1,237 4,035 2,975 1,182 3,780 Dividends payable Income taxes payable Current portion of long-term debt 635 563 226 305 1,277 7 Total current liabilities 10,863 9,012 Long-term debt Post-employment obligations and other long-term liabilities Commitments and contingencies Shareholders' investment: 16,661 9,062 19,359 8,080 Preferred shares, one dollar par value Authorized – 1,000,000 shares, none issued Common shares, without par value Authorized – 2,400,000,000 shares Issued at stated capital amount – Shares: 2019: 1,976,855,085; 2018: 1,971,189,465 Common shares held in treasury, at cost -Shares: 2019: 214,351,838; 2018: 215,570,043 Earnings employed in the business Accumulated other comprehensive income (loss) 23,853 23,512 (10,147) 25,847 (9,962) 24,560 (7,586) (8,465) Total Abbott Shareholders' Investment 31,088 30,524 Noncontrolling interests in subsidiaries 213 198 Total Shareholders' Investment 31,301 30,722 2$ 67,887 $ 67,173 The accompanying notes to consolidated financial statements are an integral part of this statement.
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