Eli Lilly and Company (LLY)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	3,024,300	7,040,500	7,138,000	6,495,300	7,589,500
Interest expense	US$ in thousands	—	485,900	331,600	339,800	359,600
Interest coverage		—	14.49	21.53	19.12	21.11

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $3,024,300K ÷ $—K
= —

Interest coverage is a financial ratio used to evaluate a company's ability to meet its interest obligations on outstanding debt. Eli Lilly and Company's interest coverage ratio has shown fluctuations over the years.

As of December 31, 2020, Eli Lilly had an interest coverage ratio of 21.11, indicating that the company generated more than enough operating income to cover its interest expenses comfortably. This high ratio suggests that Eli Lilly had a strong financial position and could easily meet its interest obligations.

By December 31, 2021, the interest coverage ratio slightly decreased to 19.12, still indicating a robust ability to cover interest payments. However, the ratio declined further to 21.53 by December 31, 2022, before dropping significantly to 14.49 by December 31, 2023. This decline may suggest that Eli Lilly's operating income was becoming less sufficient to cover its interest expenses.

Unfortunately, the data for December 31, 2024, shows an absence of a specific interest coverage ratio. It is crucial to consider the reasons for this missing data point to assess Eli Lilly's current financial health accurately.

In conclusion, the trend in Eli Lilly's interest coverage ratios indicates fluctuations in the company's ability to cover its interest expenses over the years, with some decline in recent periods. Further analysis of the company's financial statements and market conditions is needed to understand the factors influencing these changes in interest coverage.