Using the Abbott Labs balance sheet, answer the following:

1. Which balance sheet line items would you use to evaluate the companys liquidity, i.e., ability to meet short-term obligations and remain capable of dealing with unexpected opportunities or challenges.
   1. For both periods presented, compute net working capital for the periods presented. Net working capital = Current assets Current liabilities
   2. Based on your computation, has Abbotts net working capital improved or declined?
2. Which balance sheet line items would you use to evaluate the companys solvency, i.e. ability to meet long-term obligations, execute the companys long-term strategic initiatives, and remain in business.
   1. For both periods presented, compute Abbott Labs Debt-to-equity ratio. Debt-to-equity = Total liabilities Total shareholders equity.
   2. Based on your computations, has Abbotts Debt-to-equity improved or declined?

Abbott Laboratories and Subsidiaries Consolidated Balance Sheet (dollars in millions) December 31 2019 2018 $ $ 3,860 280 5,425 3,844 242 5,182 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 Inventories: Finished products Work in process Materials Total inventories Other prepaid expenses and receivables Total current assets Investments Property and equipment, at cost: Land Buildings Equipment Construction in progress 2,784 560 972 4,316 1,786 15,667 883 2,407 499 890 3,796 1,568 14,632 897 Less: accumulated depreciation and amortization Net property and equipment Intangible assets, net of amortization Goodwill Deferred income taxes and other assets 519 3,702 11,468 1,110 16,799 8,761 8,038 17,025 23,195 3,079 $ 67,887 501 3,555 10,756 894 15,706 8,143 7,563 18,942 23,254 1,885 $ 67,173 CUAD VAU $ Liabilities and Shareholders' Investment Current liabilities: Short-term borrowings Trade accounts payable Salaries, wages and commissions Other accrued liabilities Dividends payable Income taxes payable Current portion of long-term debt Total current liabilities Long-term debt Post-employment obligations and other long-term liabilities Commitments and contingencies Shareholders' investment: 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) Total Abbott Shareholders' Investment Noncontrolling interests in subsidiaries Total Shareholders' Investment 201 3,252 1,237 4,035 635 226 1,277 10,863 16,661 9,062 200 2,975 1,182 3,780 563 305 7 9,012 19,359 8,080 23,853 (10,147) 25,847 (8,465) 31,088 213 31,301 $ 67,887 23,512 (9,962) 24,560 (7,586) 30,524 198 30,722 $ 67,173 The accompanying notes to consolidated financial statements are an integral part of this statement