Eli Lilly and Company (LLY)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	64,006,300	49,489,800	48,806,000	46,633,100	39,286,100
Total stockholders’ equity	US$ in thousands	10,771,900	10,649,800	8,979,200	5,641,600	2,606,900
Financial leverage ratio		5.94	4.65	5.44	8.27	15.07

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $64,006,300K ÷ $10,771,900K
= 5.94

The financial leverage ratio of Lilly(Eli) & Co has shown fluctuations over the past five years. As of December 31, 2023, the financial leverage ratio stands at 5.94. This indicates that the company's reliance on debt to finance its assets has increased compared to the previous year (4.65 as of December 31, 2022).

Looking back further, the financial leverage ratio was 5.44 as of December 31, 2021, showing a slight decrease from the prior year. However, a notable increase in leverage was observed in 2020, with a ratio of 8.27, followed by a substantial spike in 2019 to 15.07, signifying a significant level of debt relative to equity.

It is important to note that a high financial leverage ratio indicates a higher level of financial risk due to increased debt obligations. On the other hand, a lower ratio suggests a more conservative capital structure with less reliance on debt financing.

Overall, Lilly(Eli) & Co's financial leverage ratio has experienced fluctuations in recent years, highlighting varying degrees of reliance on debt to support its operations and investments. Further analysis of the company's debt management and capital structure strategies may provide insights into its financial risk management and long-term financial sustainability.