Eli Lilly and Company (LLY)

Fixed asset turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	34,124,100	32,072,500	29,515,500	27,691,400	28,541,400	29,239,500	29,070,700	29,322,800	28,318,400	27,758,500	26,726,300	25,485,600	24,539,800	23,213,800	22,949,800	23,087,100	22,319,500	21,843,100	21,673,400	21,621,700
Property, plant and equipment	US$ in thousands	12,913,600	11,863,200	11,277,400	10,546,200	10,144,000	9,311,300	9,128,200	9,102,700	8,985,100	8,920,400	8,855,500	8,630,100	8,681,900	8,281,100	7,981,100	7,897,900	7,872,900	7,801,500	7,847,500	7,780,000
Fixed asset turnover		2.64	2.70	2.62	2.63	2.81	3.14	3.18	3.22	3.15	3.11	3.02	2.95	2.83	2.80	2.88	2.92	2.83	2.80	2.76	2.78

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $34,124,100K ÷ $12,913,600K
= 2.64

The fixed asset turnover ratio for Lilly(Eli) & Co has shown fluctuation over the past eight quarters, ranging from a high of 3.22 in Q1 2022 to a low of 2.62 in Q2 2023. The ratio indicates how efficiently the company is utilizing its fixed assets to generate revenue.

A higher fixed asset turnover ratio typically suggests that the company is effectively using its fixed assets to generate sales. In contrast, a lower ratio may indicate underutilization or inefficiency in utilizing fixed assets.

The trend observed in Lilly(Eli) & Co's fixed asset turnover ratio indicates a slight decline in efficiency in recent quarters, with the ratio decreasing from 3.22 in Q1 2022 to 2.62 in Q2 2023. This may raise concerns about the company's ability to generate revenue from its fixed assets efficiently.

It is recommended for Lilly(Eli) & Co to closely monitor and analyze the utilization of its fixed assets to identify areas for improvement and optimization. Implementing strategies to enhance efficiency in utilizing fixed assets could help increase the fixed asset turnover ratio and improve overall financial performance.