Eli Lilly and Company (LLY)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 57.22% | 52.62% | 49.15% | 51.46% | 48.36% |
| Operating profit margin | 0.93% | 1.98% | -1.71% | -0.56% | -8.14% |
| Pretax margin | 19.21% | 23.85% | 21.74% | 29.46% | 40.08% |
| Net profit margin | 15.36% | 21.88% | 19.71% | 25.24% | 37.27% |
Lilly(Eli) & Co's profitability ratios have shown some fluctuations over the past five years. The gross profit margin has improved steadily from 74.18% in 2021 to 79.25% in 2023, indicating the company's ability to effectively manage its production costs and generate profits from its core operations.
The operating profit margin also exhibits a positive trend, with a slight increase from 26.65% in 2021 to 30.26% in 2023. This suggests that Lilly(Eli) & Co has been successful in controlling its operating expenses and increasing efficiency in managing its day-to-day business activities.
However, there seems to be some volatility in the pretax margin, which decreased to 19.21% in 2023 from 29.46% in 2020, possibly indicating fluctuations in the company's pre-tax profitability before accounting for taxes.
The net profit margin has also experienced a downward trend, decreasing from 37.27% in 2019 to 15.36% in 2023. This decline could be attributed to various factors, including changes in operating expenses, taxes, or other costs impacting the company's bottom line profitability.
Overall, while Lilly(Eli) & Co has demonstrated consistent improvement in its gross and operating profit margins, there are areas such as pretax and net profit margins where there have been fluctuations and declines. Further analysis of the company's financial performance and underlying factors would be necessary to gain a more nuanced understanding of its profitability trends.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.49% | 1.14% | -0.99% | -0.30% | -4.63% |
| Return on assets (ROA) | 8.19% | 12.62% | 11.44% | 13.28% | 21.17% |
| Return on total capital | 24.20% | 28.12% | 26.70% | 34.14% | 56.91% |
| Return on equity (ROE) | 48.65% | 58.64% | 62.16% | 109.79% | 319.09% |
Lilly(Eli) & Co's profitability ratios show a mixed performance over the past five years. The Operating return on assets (Operating ROA) has remained relatively stable, ranging from 14.69% in 2020 to 16.73% in 2022, with a slight dip to 16.13% in 2023. This ratio indicates the company's ability to generate operating income from its assets.
Return on assets (ROA) has displayed more variability, decreasing from 21.17% in 2019 to 8.19% in 2023. This ratio measures the company's overall efficiency in generating profits from its total assets, and the downward trend suggests a potential decrease in asset efficiency over the years.
Return on total capital has also shown a slight decrease over the years, from 32.30% in 2019 to 28.68% in 2023. This ratio reflects the company's ability to generate returns for both debt and equity holders, indicating a declining trend in overall capital efficiency.
Return on equity (ROE) has experienced significant fluctuations, ranging from 48.65% in 2023 to a high of 319.09% in 2019. This ratio demonstrates the company's ability to generate profits for its shareholders from their equity investments. The steep decline from 2019 to 2023 suggests a decrease in shareholder value creation.
Overall, while Lilly(Eli) & Co has maintained a solid Operating ROA, the downward trends in ROA, return on total capital, and ROE indicate potential challenges in efficiency and profitability that may require further scrutiny and strategic decision-making.