Eli Lilly & Co. (NYSE:LLY)

The financial data reveals several trends related to the intangible assets and goodwill over the five-year period.

Goodwill

Goodwill shows a consistent upward trend, increasing from approximately 3,766,500 thousand US dollars in 2020 to 5,770,300 thousand US dollars in 2024. The growth accelerates notably between 2022 and 2024, suggesting significant acquisitions or revaluations during that period.

Marketed Products and Finite-lived Intangible Assets (Gross)

The values for both marketed products and gross finite-lived intangible assets are identical, reflecting a slight declining trend from 8,076,800 thousand US dollars in 2020 to 8,090,200 thousand US dollars in 2024. The amounts fluctuate slightly between years but overall show relative stability with minor decreases, particularly from 2021 to 2022 and from 2023 to 2024.

Accumulated Amortization

Accumulated amortization shows variability, initially increasing from -1,727,800 thousand US dollars in 2020 to a peak of -2,622,700 thousand US dollars in 2022, then decreasing to -2,277,000 thousand US dollars in 2023, and rising again to -2,821,600 thousand US dollars in 2024. This pattern indicates fluctuating amortization expenses, possibly influenced by asset impairment, changes in amortization schedules, or write-offs.

Finite-lived Intangible Assets (Net)

Net finite-lived intangible assets decrease overall from 6,349,000 thousand US dollars in 2020 to 5,268,600 thousand US dollars in 2024. There is a consistent decline through 2022, a temporary recovery in 2023, and a subsequent decline in 2024, suggesting amortization effects and possible disposals or impairments affecting the net book value.

Acquired IPR&D and Indefinite-lived Intangible Assets

Both acquired in-process research and development (IPR&D) and indefinite-lived intangible assets show a marked decrease from 1,925,000 thousand US dollars in 2021 to 897,700 thousand US dollars in 2024. This downward trend indicates reduction in the newly acquired or ongoing development projects and reclassification or impairment of indefinite-lived assets during the period.

Other Intangibles

Other intangible assets reveal a decreasing trend, falling from 7,450,000 thousand US dollars in 2020 to 6,166,300 thousand US dollars in 2024. The steady decline suggests amortization or write-offs impacting these assets over time.

Goodwill and Other Intangibles (Total)

The combined value of goodwill and other intangibles exhibits a moderate increase from 11,216,500 thousand US dollars in 2020 to 11,936,600 thousand US dollars in 2024. Despite fluctuations in individual components, the overall intangible asset base, inclusive of goodwill, remains relatively stable with slight growth, driven mainly by the consistent increase in goodwill.

Overall, the data indicates a strategic emphasis on acquisitions that increase goodwill, with finite-lived intangible assets diminishing due to amortization and potential impairments. The decline in acquired IPR&D and indefinite-lived intangibles may reflect maturation or disposition of certain projects or assets. The stability of marketed products suggests steady valuation of core product intangibles. Together, these patterns suggest a focus on expanding long-term intangible asset base via goodwill, while managing amortization and asset lifecycle considerations for other intangible categories.

The financial data reveals significant trends in the total assets and shareholders' equity for the company over the five-year period ending December 31, 2024.

Total Assets

Both reported and adjusted total assets show a consistent upward trajectory throughout the period. Reported total assets increased from approximately 46.6 billion USD in 2020 to 78.7 billion USD in 2024, demonstrating a compound growth pattern, with a particularly notable acceleration between 2022 and 2024. Adjusted total assets, which exclude goodwill, followed a similar pattern, rising from 42.9 billion USD in 2020 to 72.9 billion USD in 2024. This increase suggests ongoing investment and expansion activities while maintaining asset quality when goodwill is excluded.

Shareholders' Equity

The reported total shareholders' equity also shows growth, increasing from approximately 5.6 billion USD in 2020 to 14.2 billion USD in 2024. This reflects an improving equity base, with a marked increase between 2020 and 2021, continuing upward at a steadier pace across the subsequent years.

In contrast, the adjusted shareholders' equity, which removes the impact of goodwill, exhibits a different trend. Although it increases initially from 1.9 billion USD in 2020 to 6.6 billion USD in 2022, it then declines to 5.8 billion USD in 2023 before recovering to 8.4 billion USD in 2024. This fluctuation suggests some volatility or impairment adjustments related to goodwill affecting the equity base, impacting the adjusted equity measure more noticeably than the reported figure.

Insights and Patterns

The disparity between reported and adjusted figures, especially in shareholders' equity, indicates the material influence of goodwill on the company's financial structure. The consistent growth in reported assets and equity suggests overall strengthening of the financial position, while the adjusted figures highlight the importance of excluding goodwill for a clearer view of tangible net worth.

The sharp increase in total assets and shareholders' equity in 2023 and 2024 signals a possible major acquisition or capital investment, which significantly enhanced the asset base and equity. The recovery in adjusted equity after the decline in 2023 could indicate resolution of impairments or improved operational performance impacting net assets.

Total Asset Turnover

The reported total asset turnover ratio demonstrated a slight increase from 0.53 in 2020 to 0.58 in 2021 and 2022, followed by a decline to 0.53 in 2023, before rising again to 0.57 in 2024. The adjusted total asset turnover mirrored this pattern but consistently showed higher values, starting at 0.57 in 2020 and peaking at 0.63 during 2021 and 2022, then dipping to 0.58 in 2023 and recovering to 0.62 in 2024. Overall, asset utilization appears relatively stable with some fluctuations, and the adjustment for goodwill results in improved turnover rates.

Financial Leverage

Reported financial leverage declined substantially from 8.27 in 2020 to 5.44 in 2021, then continued its downward trend to 4.65 in 2022. However, leverage increased sharply to 5.94 in 2023 before slightly decreasing to 5.55 in 2024. Adjusted financial leverage, which accounts for goodwill, showed a more pronounced decrease from 22.86 in 2020 to 8.83 in 2021 and further to 6.91 in 2022. It then rose to 10.13 in 2023 and dropped to 8.66 in 2024. This indicates significant deleveraging over the early years, with some volatility observed afterward, and higher leverage when goodwill is considered.

Return on Equity (ROE)

The reported ROE dropped sharply from an exceptionally high 109.79% in 2020 to 62.16% in 2021, followed by a gradual decline to 58.64% in 2022 and 48.65% in 2023. In 2024, it rebounded noticeably to 74.62%. The adjusted ROE showed a similar downward trend but from an even more elevated starting point of 330.31% in 2020, dropping to 109.72% in 2021, then continuing down to 94.95% in 2022 and 89.85% in 2023, before increasing to 125.75% in 2024. These changes reflect high profitability metrics with volatility, influenced strongly by adjustments for goodwill.

Return on Assets (ROA)

The reported ROA experienced a decrease from 13.28% in 2020 to 11.44% in 2021, then increased to 12.62% in 2022 before falling to 8.19% in 2023 and recovering to 13.45% in 2024. The adjusted ROA showed a similar pattern but with consistently higher values, starting at 14.45% in 2020, decreasing to 12.43% in 2021, rising to 13.75% in 2022, dropping to 8.87% in 2023, and finally rebounding to 14.52% in 2024. This indicates that asset profitability was somewhat volatile over the period but generally improved after 2023, with goodwill adjustments enhancing the profitability ratios.

Total Assets

The reported total assets exhibit a consistent upward trend over the five-year period, increasing from approximately 46.63 billion USD in 2020 to nearly 78.71 billion USD in 2024. This growth reflects an expansion of the company's asset base, with a significant jump observed between 2022 and 2023, continuing into 2024.

The adjusted total assets, which exclude goodwill, follow a similar growth trajectory, rising from about 42.87 billion USD in 2020 to approximately 72.94 billion USD in 2024. The increase mirrors that of the reported assets but is slightly lower, reflecting the deduction of goodwill from total assets.

Total Asset Turnover

The reported total asset turnover ratio remained stable but showed minor fluctuations between 2020 and 2024. The ratio starts at 0.53 in 2020, increases to 0.58 in 2021 and 2022, dips back to 0.53 in 2023, and then rises again to 0.57 in 2024. This pattern indicates that the company’s efficiency in generating sales from its assets has been relatively steady with slight variations.

The adjusted total asset turnover ratio, which considers assets net of goodwill, is consistently higher than the reported asset turnover throughout the period. It moves from 0.57 in 2020, peaks at 0.63 in 2021 and 2022, drops to 0.58 in 2023, and then improves to 0.62 in 2024. This suggests that when goodwill is excluded, the company appears somewhat more efficient at leveraging its assets to generate revenue.

The data reveals notable developments in the company's financial structure over the five-year period ending in 2024. Total assets, both reported and goodwill adjusted, show a consistent upward trajectory, indicating growth and expansion of the asset base. Reported total assets increased substantially from approximately 46.6 billion US dollars in 2020 to 78.7 billion in 2024. Adjusted total assets followed a similar pattern, rising from about 42.9 billion US dollars to 72.9 billion during the same timeframe. This growth suggests significant investment and accumulation of resources over the years.

Shareholders' equity, measured both on a reported and adjusted basis, demonstrates an overall positive trend, although the patterns differ. Reported equity experienced robust growth, increasing from 5.6 billion US dollars in 2020 to 14.2 billion in 2024. This upward movement reflects improved retained earnings, capital contributions, or revaluations increasing the book value of equity. Conversely, adjusted equity—accounting for goodwill—showed an initial increase from 1.9 billion to 6.6 billion between 2020 and 2022, followed by a decline in 2023 to approximately 5.8 billion and a moderate recovery to 8.4 billion in 2024. This variability could suggest impairment or revaluation of intangible assets impacting adjusted equity calculations.

The financial leverage ratios exhibit contrasting trends when comparing reported and adjusted figures, highlighting the impact of goodwill adjustments on the financial structure assessment. Reported financial leverage decreased significantly from 8.27 in 2020 to a low of 4.65 in 2022, indicating a reduction in the proportion of liabilities relative to equity, before increasing to 5.94 in 2023 and slightly decreasing to 5.55 in 2024. This implies an initial strengthening of the equity base relative to debt, followed by more moderate increases in leverage.

In stark contrast, adjusted financial leverage remains notably higher throughout the period, beginning at an extremely elevated ratio of 22.86 in 2020 and dropping sharply to 6.91 by 2022. However, this ratio then rises again to 10.13 in 2023 before falling back to 8.66 in 2024. The elevated levels of adjusted leverage suggest that intangible assets such as goodwill, when removed from equity, reveal greater reliance on debt financing or other liabilities, with fluctuations possibly reflective of impairments, revaluations, or changes in debt structure.

Overall, the company demonstrates steady asset growth and a strengthening reported equity base, although adjusted equity and leverage metrics indicate volatility primarily linked to goodwill considerations. The divergence between reported and adjusted financial leverage underscores the importance of assessing intangible asset impacts for a comprehensive understanding of financial risk and capital structure stability.

Total Assets

Consistent and substantial increase in both reported and adjusted total assets from 2020 to 2024, indicating expansion and asset accumulation.

Shareholders’ Equity

Reported equity steadily grows with a significant increase over five years; adjusted equity increases initially but shows volatility in the latter years, reflecting goodwill adjustments.

Financial Leverage

Reported leverage declines initially then moderately rises, suggesting improved capital structure followed by cautious increase in debt levels; adjusted leverage remains elevated and volatile, highlighting the impact of intangible assets on perceived risk.

Shareholders' Equity Trends

The reported total shareholders’ equity of the company shows a consistent upward trend over the five-year period, increasing from approximately $5.64 billion in 2020 to about $14.19 billion in 2024. This reflects substantial growth in the company’s net assets attributable to shareholders.

In contrast, the adjusted total shareholders’ equity, which factors in goodwill adjustments, demonstrates more variability. It rose sharply from around $1.88 billion in 2020 to $6.58 billion in 2022 but then experienced a decline in 2023 to approximately $5.83 billion before climbing again to about $8.42 billion in 2024. These fluctuations suggest significant adjustments related to goodwill impacting the equity base.

Return on Equity (ROE) Trends

The reported ROE exhibits a decreasing trend from 109.79% in 2020 to 48.65% in 2023, followed by a notable rebound to 74.62% in 2024. Despite the decline, the ROE remains at a relatively high level, indicating strong profitability relative to reported equity.

The adjusted ROE, which accounts for goodwill adjustments, shows a similar downward trend but at much higher magnitudes. It starts at an exceptionally high level of 330.31% in 2020, dropping significantly to 89.85% in 2023, then rising again to 125.75% in 2024. This pattern reflects considerable volatility in profitability when goodwill is excluded from equity, though the returns remain robust throughout the period.

Overall Insights

The company’s reported financials show steady growth in shareholders' equity accompanied by strong but somewhat declining profitability that partially recovers in the latest year. Adjusting for goodwill reveals greater volatility in both equity base and returns, indicating that goodwill has a substantial effect on the financial position and performance indicators.

The sharp changes in adjusted equity and adjusted ROE highlight the importance of goodwill considerations in evaluating the company’s underlying profitability and capital structure trends. The recovery in both reported and adjusted ROE in 2024 suggests an improving profitability environment or operational performance during that year.

The analysis of the presented financial data reveals significant trends and fluctuations in asset values and return on assets over the five-year period from 2020 to 2024.

Total Assets

Reported total assets show a steady increase from 46,633,100 thousand US dollars in 2020 to 78,714,900 thousand US dollars in 2024, indicating substantial growth in the asset base over the period. The increase is especially pronounced between 2022 and 2023, and continues strongly into 2024.

Adjusted total assets, which exclude goodwill, exhibit a similar upward trajectory, rising from 42,866,600 thousand US dollars in 2020 to 72,944,600 thousand US dollars in 2024. The trends between reported and adjusted total assets closely mirror each other, with adjusted assets consistently lower due to the exclusion of goodwill, but maintaining strong growth patterns.

Return on Assets (ROA)

Reported ROA starts at 13.28% in 2020 and experiences a decline to 11.44% in 2021, followed by a slight recovery to 12.62% in 2022. A significant dip occurs in 2023, where ROA drops to 8.19%, before recovering sharply to 13.45% in 2024. This pattern reflects variability in profitability relative to total assets.

Adjusted ROA follows a comparable pattern, beginning at 14.45% in 2020, decreasing to 12.43% in 2021, then improving to 13.75% in 2022. It also dips in 2023 to 8.87% and rebounds strongly to 14.52% in 2024. The adjusted ROA figures are consistently higher than the reported ROA, indicating that excluding goodwill leads to a more favorable assessment of operational efficiency.

Overall Insights

The asset growth suggests expansion or acquisitions contributing to the company's broader asset base over the years. However, the volatility in ROA indicates fluctuations in how effectively these assets generate returns, with a notable performance decline in 2023 that was recovered in 2024.

The gap between reported and adjusted ROA suggests that goodwill has a dilutive effect on profitability metrics. The adjusted figures, being higher, imply that goodwill may be inflating asset values without proportional income generation.