Eli Lilly and Company (LLY)

Return on total capital

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	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	9,347,100	8,580,500	8,525,100	7,025,000
Long-term debt	US$ in thousands	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	13,817,900	13,662,200	13,717,600	13,610,200
Total stockholders’ equity	US$ in thousands	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	2,606,900	3,382,500	2,780,500	2,480,300
Return on total capital		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%	56.91%	50.34%	51.67%	43.66%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $7,040,500K ÷ ($18,320,800K + $10,771,900K)
= 24.20%

Lilly(Eli) & Co's return on total capital has shown a downward trend over the past eight quarters. The return on total capital was 28.68% in Q4 2023, decreasing from 29.83% in Q3 2023, and continuing the declining trend from the previous quarters. The company's return on total capital was highest at 34.21% in Q2 2022 and has gradually decreased since then.

This decreasing trend in return on total capital may indicate potential challenges in generating profits relative to the total capital employed by the company. It is essential for Lilly(Eli) & Co to closely monitor and improve its operational efficiency and capital allocation strategies to enhance its return on total capital in the future. Additionally, further analysis of the company's financial statements and operational performance may provide insights into the factors driving the fluctuation in return on total capital.