Eli Lilly and Company (LLY)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.36 | 0.38 | 0.33 | 0.38 | 0.29 | 0.31 | 0.33 | 0.36 | 0.30 | 0.30 | 0.31 | 0.32 | 0.31 | 0.32 | 0.31 | 0.35 | 0.36 | 0.37 | 0.36 | 0.34 |
| Debt-to-capital ratio | 0.67 | 0.67 | 0.64 | 0.66 | 0.63 | 0.62 | 0.62 | 0.63 | 0.58 | 0.58 | 0.63 | 0.62 | 0.63 | 0.67 | 0.70 | 0.70 | 0.75 | 0.77 | 0.79 | 0.82 |
| Debt-to-equity ratio | 2.01 | 2.04 | 1.75 | 1.92 | 1.70 | 1.60 | 1.64 | 1.69 | 1.38 | 1.40 | 1.72 | 1.62 | 1.71 | 2.00 | 2.29 | 2.35 | 2.94 | 3.38 | 3.68 | 4.54 |
| Financial leverage ratio | 5.55 | 5.31 | 5.30 | 4.99 | 5.94 | 5.16 | 4.95 | 4.75 | 4.65 | 4.71 | 5.51 | 5.03 | 5.44 | 6.21 | 7.42 | 6.79 | 8.27 | 9.10 | 10.25 | 13.35 |
Eli Lilly and Company's solvency ratios provide insights into the company's ability to meet its long-term financial obligations. Here is a detailed analysis based on the provided data:
1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. Eli Lilly's debt-to-assets ratio has remained relatively stable over the years, ranging from 0.29 to 0.38. A lower ratio indicates a lower financial risk as the company relies less on debt to fund its operations.
2. Debt-to-capital ratio: This ratio shows the percentage of the company's capital that is funded by debt. Eli Lilly's debt-to-capital ratio has shown a decreasing trend, falling from 0.82 in March 2020 to around 0.64 by June 2024. A declining ratio signifies a decrease in reliance on debt financing, which can improve the company's financial stability.
3. Debt-to-equity ratio: The debt-to-equity ratio indicates the level of financial leverage in a company's capital structure. Eli Lilly's debt-to-equity ratio has demonstrated a consistent decrease over the years, dropping from 4.54 in March 2020 to around 1.75 by June 2024. A lower ratio suggests a healthier balance between debt and equity financing, reducing the company's risk of financial distress.
4. Financial leverage ratio: This ratio compares the company's total assets to its equity, reflecting the proportion of assets financed by debt. Eli Lilly's financial leverage ratio has generally decreased from 13.35 in March 2020 to around 5.55 by December 2024. A declining ratio indicates a reduced dependence on debt financing, which can enhance the company's financial strength and stability.
In conclusion, Eli Lilly and Company has shown improvements in its solvency ratios over the years, with decreasing levels of debt relative to assets, capital, equity, and total assets. These trends suggest that the company has been effectively managing its debt levels and enhancing its financial resilience.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 27.63 | 19.18 | 16.26 | 14.44 | 14.49 | 15.23 | 19.74 | 18.98 | 21.53 | 20.91 | 19.82 | 20.99 | 19.12 | 20.52 | 20.74 | 20.80 | 21.11 | 18.54 | 17.64 | 16.28 |
Eli Lilly and Company's interest coverage ratio has exhibited fluctuations over the years, reflecting its ability to service its interest obligations. The data indicates that the company's interest coverage ratio has generally been healthy and above industry benchmarks, ranging from a low of 14.44 on March 31, 2024, to a high of 27.63 on December 31, 2024.
In the most recent period, on December 31, 2024, Eli Lilly's interest coverage ratio stood at 27.63, suggesting that the company generated ample operating income to cover its interest expenses nearly 28 times over. This signifies a robust financial position and indicates that the company has a strong ability to meet its interest payment obligations.
However, it is noteworthy that there have been some periods where the interest coverage ratio dropped, such as on March 31, 2023, and September 30, 2023, where the ratios were 18.98 and 15.23, respectively. These lower ratios may indicate potential pressures on Eli Lilly's ability to cover its interest costs comfortably during those periods.
Overall, while Eli Lilly's interest coverage ratio has shown some fluctuations, the company has generally maintained a healthy interest coverage position, indicating its capacity to service its debt obligations with its operating earnings. Investors and stakeholders may find this ratio beneficial in assessing the company's financial health and risk profile.