Eli Lilly and Company (LLY)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	2,818,600	2,067,000	3,818,500	3,657,100	2,337,500
Short-term investments	US$ in thousands	109,100	144,800	90,100	24,200	101,000
Receivables	US$ in thousands	11,336,200	6,896,000	6,672,800	5,875,300	4,547,300
Total current liabilities	US$ in thousands	27,293,200	17,138,200	15,052,700	12,481,600	11,775,200
Quick ratio		0.52	0.53	0.70	0.77	0.59

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,818,600K + $109,100K + $11,336,200K) ÷ $27,293,200K
= 0.52

The quick ratio measures a company's ability to meet its short-term liabilities with its most liquid assets. A higher quick ratio is generally preferable as it indicates a stronger ability to cover immediate financial obligations.

Looking at Lilly(Eli) & Co's quick ratio over the past five years, we observe a fluctuating trend. The ratio has decreased from 1.08 in 2020 to 0.73 in 2023. This decline may suggest potential liquidity challenges in meeting short-term obligations with readily available assets.

While a quick ratio of 0.73 in 2023 may raise some concerns, it's important to note that the ratio was higher in the previous years, with the highest point at 1.08 in 2020. This indicates that the company had a stronger liquidity position in the past.

Further investigation into the components contributing to the quick ratio, such as cash, marketable securities, and receivables, would provide additional insights into Lilly(Eli) & Co's liquidity management. Management may need to assess its current asset composition and look for ways to improve liquidity to ensure the company can comfortably meet its short-term obligations moving forward.