Eli Lilly and Company (LLY)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 60.12% | 57.22% | 52.62% | 49.15% | 51.46% |
| Operating profit margin | 6.71% | 0.93% | 1.98% | -1.71% | -0.56% |
| Pretax margin | 28.15% | 19.21% | 23.85% | 21.74% | 29.46% |
| Net profit margin | 23.51% | 15.36% | 21.88% | 19.71% | 25.24% |
The profitability ratios of Eli Lilly and Company have exhibited fluctuations over the past five years. The gross profit margin, which represents the proportion of revenue remaining after accounting for the cost of goods sold, has shown an increasing trend from 49.15% in 2021 to 60.12% in 2024. This indicates that the company has been able to effectively control its production costs and increase its profitability from core operations.
On the other hand, the operating profit margin, which reflects the percentage of revenue that remains after deducting operating expenses, has shown variability, starting from negative values in 2020 and 2021, but steadily improving to reach 6.71% in 2024. This improvement suggests that Eli Lilly has made significant strides in managing its operating costs and improving operational efficiency.
The pretax margin, representing the percentage of each dollar of revenue that results in pre-tax profit, has fluctuated, reaching a peak of 29.46% in 2020, declining in subsequent years, and then bouncing back to 28.15% in 2024. This fluctuation may reflect changes in the company's tax structure or overall profitability.
Lastly, the net profit margin, which indicates the percentage of revenue that translates into net income, has shown a declining trend from 25.24% in 2020 to 15.36% in 2023, before rebounding to 23.51% in 2024. This fluctuation could be attributed to various factors such as changes in expenses, taxes, or non-operating income.
Overall, the profitability ratios of Eli Lilly and Company highlight the company's ability to effectively manage costs, improve operational efficiency, and generate profits over the analyzed period, despite some fluctuations in performance metrics.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.84% | 0.49% | 1.14% | -0.99% | -0.30% |
| Return on assets (ROA) | 13.45% | 8.19% | 12.62% | 11.44% | 13.28% |
| Return on total capital | 7.08% | 24.20% | 28.12% | 26.70% | 34.14% |
| Return on equity (ROE) | 74.62% | 48.65% | 58.64% | 62.16% | 109.79% |
Eli Lilly and Company's profitability ratios depict a mixed performance over the last five years.
1. Operating return on assets (Operating ROA) shows a fluctuating trend from -0.30% in 2020 to 3.84% in 2024, with a significant improvement in recent years.
2. Return on assets (ROA) declined from 13.28% in 2020 to 8.19% in 2023 before recovering to 13.45% in 2024. While showing variability, the company managed to achieve a higher ROA in the latest year.
3. Return on total capital decreased from 34.14% in 2020 to 7.08% in 2024, indicating a significant decline in the company's ability to generate returns on its total capital over the period.
4. Return on equity (ROE) followed a similar pattern, declining from 109.79% in 2020 to 48.65% in 2023 before improving to 74.62% in 2024. This suggests fluctuations in the company's ability to generate profits relative to the shareholders' equity.
Overall, while Eli Lilly and Company has seen fluctuations in its profitability ratios over the years, the latest data for 2024 shows an improvement in its return on assets and equity. However, the return on total capital remains lower compared to previous years, indicating the company may need to focus on optimizing its capital efficiency.