Eli Lilly and Company (LLY)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Inventory turnover	2.37	2.22	2.44	2.43	2.53	2.89	2.90	2.91	3.14	3.68	3.52	3.68	3.71	3.51	3.57	3.48	2.99	2.74	2.83	3.03
Receivables turnover	3.39	3.39	2.98	3.59	3.01	3.09	3.22	3.07	4.14	3.51	3.79	3.76	4.24	3.95	3.87	3.83	4.18	3.97	3.97	3.63
Payables turnover	5.56	5.73	5.41	6.00	5.62	5.81	5.62	6.57	7.00	8.38	8.28	10.01	8.62	8.75	8.55	7.76	7.41	6.81	7.52	7.79
Working capital turnover	10.32	6.06	12.62	5.45	—	31.79	12.21	5.77	31.84	14.71	19.45	8.19	8.33	6.73	12.14	5.21	4.93	5.45	8.85	16.68

Eli Lilly and Company's inventory turnover ratio gradually increased from 3.03 in March 2020 to 3.14 in December 2022, indicating an efficient management of inventory. However, a slight decline was observed in the following periods. This suggests that the company may have been holding more inventory compared to sales.

The receivables turnover ratio fluctuated during the period, with a peak of 4.24 in December 2021 and a dip to 2.98 in June 2024. This may indicate changes in the company's credit policies or the efficiency of its collection processes.

The payables turnover ratio experienced some variation, from 5.41 in June 2024 to a high of 10.01 in March 2022. A higher ratio indicates that the company is taking longer to pay its suppliers, which could either be a strategic move or a sign of financial stress.

The working capital turnover ratio showed a fluctuating trend, with significant changes in values over the years. One notable point is the absence of data for the working capital turnover ratio in December 2023. This ratio helps assess how effectively the company utilizes its working capital to generate sales revenue.

In conclusion, Eli Lilly and Company's activity ratios demonstrate varying levels of efficiency in managing inventory, receivables, payables, and working capital over the period analyzed. It is important for potential investors and stakeholders to monitor these ratios to gauge the company's operational effectiveness and financial health.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	154.20	164.77	149.38	150.02	144.35	126.50	126.00	125.24	116.34	99.12	103.61	99.07	98.50	104.02	102.22	105.01	121.96	133.35	128.90	120.33
Days of sales outstanding (DSO)	days	107.58	107.65	122.65	101.72	121.25	117.94	113.42	118.92	88.19	103.92	96.33	97.16	86.01	92.37	94.27	95.36	87.39	91.90	91.86	100.43
Number of days of payables	days	65.60	63.75	67.41	60.82	64.98	62.85	64.97	55.55	52.11	43.55	44.09	36.47	42.35	41.71	42.70	47.03	49.23	53.64	48.51	46.84

The activity ratios of Eli Lilly and Company indicate how efficiently the company manages its assets and operations.

1. Days of Inventory on Hand (DOH): This ratio measures how many days it takes for the company to sell its average inventory. From March 31, 2020, to December 31, 2024, Eli Lilly's DOH fluctuated between 98.50 days and 164.77 days. The trend shows that in recent periods, the company has experienced a slight increase in the number of days it holds inventory, reaching a peak of 164.77 days on September 30, 2024. This may suggest either inventory management challenges or changes in sales patterns.

2. Days of Sales Outstanding (DSO): DSO evaluates how long it takes for the company to collect payments after making sales. Eli Lilly's DSO ranged from 86.01 days to 122.65 days during the same period. The data indicates some volatility in collection periods, with peaks observed in June 30, 2024, and December 31, 2024. A higher DSO can signify delays in receiving payments from customers or changes in credit policies.

3. Number of Days of Payables: This ratio reflects the average number of days it takes for a company to pay its suppliers. Eli Lilly's payables days ranged from 36.47 days to 67.41 days from March 31, 2020, to December 31, 2024. The trend shows some fluctuations but generally increased towards the end of the period, indicating the company may be taking longer to settle its payables.

Overall, these activity ratios suggest that Eli Lilly and Company may be facing challenges in managing its inventory efficiently, collecting payments promptly, and managing its payables effectively. Further analysis and comparison with industry benchmarks may provide additional insights into the company's operational performance and areas for improvement.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Fixed asset turnover	2.63	2.53	2.62	2.64	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
Total asset turnover	0.57	0.54	0.54	0.56	0.53	0.55	0.54	0.52	0.58	0.62	0.62	0.62	0.58	0.58	0.56	0.54	0.53	0.53	0.55	0.56

Eli Lilly and Company's long-term activity ratios provide insights into how efficiently the company is utilizing its assets to generate sales.

1. Fixed Asset Turnover: This ratio measures how well the company is using its fixed assets to generate sales. Eli Lilly's fixed asset turnover has shown fluctuating trend over the years, ranging from a high of 3.22 in March 2023 to a low of 2.53 in September 2024. Overall, the ratio has been relatively stable, indicating that the company has been able to efficiently generate sales using its fixed assets.

2. Total Asset Turnover: This ratio reflects the company's ability to generate sales from all its assets. Eli Lilly's total asset turnover has also fluctuated over the years, with a range between 0.52 in March 2023 to 0.62 in March and June 2022. The ratio has generally shown some variability but has remained around the 0.55-0.62 range in recent quarters.

In conclusion, Eli Lilly and Company has demonstrated a reasonable level of efficiency in utilizing its fixed and total assets to generate sales, as reflected by the stable to slightly fluctuating trends in both the fixed asset turnover and total asset turnover ratios.