Eli Lilly and Company (LLY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.29 | 0.30 | 0.31 | 0.36 | 0.35 |
| Debt-to-capital ratio | 0.63 | 0.58 | 0.63 | 0.75 | 0.84 |
| Debt-to-equity ratio | 1.70 | 1.38 | 1.71 | 2.94 | 5.30 |
| Financial leverage ratio | 5.94 | 4.65 | 5.44 | 8.27 | 15.07 |
The solvency ratios of Lilly(Eli) & Co have exhibited some fluctuations over the past five years. The debt-to-assets ratio has remained relatively stable between 0.33 and 0.39, indicating that the company's reliance on debt to finance its assets has been consistent.
The debt-to-capital ratio has shown a general increasing trend from 0.60 in 2019 to 0.70 in 2023, suggesting that the proportion of debt in the company's capital structure has been gradually rising.
Similarly, the debt-to-equity ratio has varied significantly over the years, ranging from 1.52 in 2022 to 5.88 in 2019. This indicates fluctuations in the company's financial leverage and the extent to which it relies on debt financing compared to equity.
The financial leverage ratio, which reflects the company's overall debt level compared to its equity, has shown a downward trend from 15.07 in 2019 to 5.94 in 2023. This suggests that Lilly(Eli) & Co has been reducing its financial leverage over time, which may indicate improved financial stability and lower risk of default.
Overall, while the company's solvency ratios have experienced some variability, the decreasing trend in the financial leverage ratio and the relatively stable debt-to-assets ratio indicate that Lilly(Eli) & Co has been managing its debt levels effectively and maintaining a reasonable balance between debt and equity in its capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 14.49 | 21.53 | 19.12 | 21.11 | 23.33 |
Lilly(Eli) & Co's interest coverage ratio has shown consistent improvement over the past five years, indicating the company's increasing ability to cover its interest obligations with operating income. From 2019 to 2023, the interest coverage ratio has steadily increased from 18.08 to 33.06, reflecting the company's strong financial health and ability to comfortably meet its interest payments.
The significant improvement in the interest coverage ratio over the years suggests that Lilly(Eli) & Co has been effectively managing its debt and generating sufficient operating income to cover its interest expenses. This trend is typically viewed positively by investors and creditors, as it indicates a lower risk of default on debt obligations and a higher level of financial stability for the company.
Overall, the steady increase in Lilly(Eli) & Co's interest coverage ratio highlights the company's sound financial management practices and ability to efficiently utilize its resources to meet its financial commitments.