Eli Lilly and Company (LLY)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 4,962,800 | 6,096,400 | 7,191,400 | 8,123,700 | 7,040,500 | 6,573,900 | 7,669,100 | 6,632,000 | 7,138,000 | 6,878,900 | 6,560,800 | 7,069,500 | 6,495,200 | 7,132,200 | 7,330,100 | 7,381,300 | 7,589,500 | 6,790,200 | 6,776,600 | 6,621,400 |
| Long-term debt | US$ in thousands | 28,527,100 | 29,045,400 | 23,730,400 | 24,559,900 | 18,320,800 | 17,923,600 | 18,158,400 | 18,880,500 | 14,737,500 | 14,143,800 | 14,692,000 | 15,152,900 | 15,346,400 | 15,522,400 | 14,736,600 | 16,199,600 | 16,586,600 | 16,334,600 | 15,064,400 | 13,982,300 |
| Total stockholders’ equity | US$ in thousands | 14,192,100 | 14,240,000 | 13,562,000 | 12,812,200 | 10,771,900 | 11,220,400 | 11,063,800 | 11,190,400 | 10,649,800 | 10,070,100 | 8,544,700 | 9,330,800 | 8,979,200 | 7,757,000 | 6,444,400 | 6,898,700 | 5,641,600 | 4,826,900 | 4,092,900 | 3,078,800 |
| Return on total capital | 11.62% | 14.08% | 19.28% | 21.74% | 24.20% | 22.56% | 26.24% | 22.05% | 28.12% | 28.41% | 28.23% | 28.87% | 26.70% | 30.64% | 34.61% | 31.96% | 34.14% | 32.09% | 35.37% | 38.81% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $4,962,800K ÷ ($28,527,100K + $14,192,100K)
= 11.62%
Return on total capital is a key financial ratio that indicates how effectively a company is utilizing its total capital to generate profits. Looking at the data provided for Eli Lilly and Company, we observe fluctuations in the return on total capital over the quarters.
The return on total capital for Eli Lilly and Company ranged from a high of 38.81% in March 2020 to a low of 11.62% in December 2024. The ratio generally decreased over the years, with occasional fluctuations. It peaked in the first half of 2020 before gradually declining. Notably, there was a significant drop from the first quarter of 2023 to the second quarter of 2023.
The declining trend in the return on total capital indicates a potential inefficiency in utilizing the company's total capital to generate returns for its shareholders. Management should closely monitor and analyze the factors contributing to this decline to make strategic decisions that may improve the company's financial performance.
Peer comparison
Dec 31, 2024