Question

Write a financial statement analysis report on the corresponding stock:

ABBV, AbbVie

You should address the following five questions: Analyzing the income statement; Analyzing the balance sheet; Analyzing the statement of cash flows; Analyzing the market ratios and the peer companies to suggest as of the day you conclude your report, if the stock of underlying company that you analyze is overpriced, fairly priced, or underpriced. Present and explain the major upsides and the concerns that you identified from the firm’s financial statements.

To answer the five questions above, you should, include the following analyses as fit. If there is no data for a certain ratio, you may skip it without penalty Activity ratios,. Liquidity ratios, Solvency ratios,. Profitability ratios, . P/E, P/S, P/B,Evaluation of any financial reporting quality issues

Answer 1

		Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	Turnover Ratios
	Inventory turnover	4.10	4.81	4.39	4.04	2.62
	Receivables turnover	6.13	6.08	5.55	5.39	4.83
	Payables turnover	5.12	4.99	4.78	4.15	2.82
	Working capital turnover	0.98	—	6.16	4.00	4.22
	Average No.

Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Current ratio	3.18	0.98	1.28	1.65	1.50
	Quick ratio	2.91	0.78	0.89	1.14	1.21
	Cash ratio	2.56	0.47	0.59	0.66	0.77

Liquidity ratio	Description	The company
Current ratio	A liquidity ratio calculated as current assets divided by current liabilities.	AbbVie Inc.’s current ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Quick ratio	A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities.	AbbVie Inc.’s quick ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Cash ratio	A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities.	AbbVie Inc.’s cash ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Profitability
Free Operating Cash Flow/Revenue	17.86
Gross Margin	77.14%
Operating margin	32.14%
Pretax margin	25.14%
Net Profit margin	21.34%

Profitability ratio	Description	The company
Gross profit margin	Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures.	AbbVie Inc.’s gross profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.
Operating profit margin	A profitability ratio calculated as operating income divided by revenue.	AbbVie Inc.’s operating profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Net profit margin	An indicator of profitability, calculated as net income divided by revenue.	AbbVie Inc.’s net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.