Eli Lilly and Company (LLY)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		2.37	2.53	3.14	3.71	2.99
DOH	days	154.20	144.35	116.34	98.50	121.96

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.37
= 154.20

To analyze Eli Lilly and Company's days of inventory on hand (DOH) over the years:

1. The DOH decreased from 121.96 days as of December 31, 2020, to 98.50 days as of December 31, 2021. This implies that the company was able to manage its inventory more efficiently, potentially through better inventory management practices or more accurate demand forecasting.

2. However, the DOH increased to 116.34 days by December 31, 2022, and further spiked to 144.35 days by December 31, 2023. These increases suggest that Eli Lilly may have faced challenges in controlling its inventory levels, which could lead to higher holding costs and potential obsolescence risks.

3. By December 31, 2024, the DOH reached 154.20 days, indicating a continued increase in the time it takes for the company to sell its inventory. This trend may raise concerns about overstocking or declining sales, which could impact profitability and cash flow.

In conclusion, Eli Lilly and Company's fluctuating DOH over the years reflects varying inventory management performances. It is essential for the company to strike a balance between maintaining adequate inventory levels to meet demand and avoiding excessive inventory buildup to improve operational efficiency and financial health.