Stock Analysis on Net

Eli Lilly & Co. (NYSE:LLY)

Analysis of Operating Leases

Microsoft Excel

Adjustments to Financial Statements for Operating Leases

Eli Lilly & Co., adjustments to financial statements

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1
Total assets (adjusted) 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Adjustment to Total Debt
Total debt (as reported) 25,225,300 16,238,600 16,884,700 16,595,300 15,317,200
Add: Operating lease liability (before adoption of FASB Topic 842)2
Add: Current portions of operating lease liabilities (included in Other current liabilities) 197,000 154,200 148,400 150,900 121,700
Add: Long-term portions of operating lease liabilities (included in Other noncurrent liabilities) 910,400 574,000 537,300 512,800 486,700
Total debt (adjusted) 26,332,700 16,966,800 17,570,400 17,259,000 15,925,600

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1, 2 Equal to total present value of future operating lease payments.


Eli Lilly & Co., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Eli Lilly & Co., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Total Asset Turnover1
Reported total asset turnover 0.53 0.58 0.58 0.53 0.57
Adjusted total asset turnover 0.53 0.58 0.58 0.53 0.57
Debt to Equity2
Reported debt to equity 2.34 1.52 1.88 2.94 5.88
Adjusted debt to equity 2.44 1.59 1.96 3.06 6.11
Return on Assets3 (ROA)
Reported ROA 8.19% 12.62% 11.44% 13.28% 21.17%
Adjusted ROA 8.19% 12.62% 11.44% 13.28% 21.17%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Eli Lilly & Co. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Eli Lilly & Co. adjusted debt to equity ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Eli Lilly & Co. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Eli Lilly & Co., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Revenue 34,124,100 28,541,400 28,318,400 24,539,800 22,319,500
Total assets 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Activity Ratio
Total asset turnover1 0.53 0.58 0.58 0.53 0.57
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Revenue 34,124,100 28,541,400 28,318,400 24,539,800 22,319,500
Adjusted total assets 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Activity Ratio
Adjusted total asset turnover2 0.53 0.58 0.58 0.53 0.57

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 34,124,100 ÷ 64,006,300 = 0.53

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 34,124,100 ÷ 64,006,300 = 0.53

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Eli Lilly & Co. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Debt to Equity

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total debt 25,225,300 16,238,600 16,884,700 16,595,300 15,317,200
Total Eli Lilly and Company shareholders’ equity 10,771,900 10,649,800 8,979,200 5,641,600 2,606,900
Solvency Ratio
Debt to equity1 2.34 1.52 1.88 2.94 5.88
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt 26,332,700 16,966,800 17,570,400 17,259,000 15,925,600
Total Eli Lilly and Company shareholders’ equity 10,771,900 10,649,800 8,979,200 5,641,600 2,606,900
Solvency Ratio
Adjusted debt to equity2 2.44 1.59 1.96 3.06 6.11

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Debt to equity = Total debt ÷ Total Eli Lilly and Company shareholders’ equity
= 25,225,300 ÷ 10,771,900 = 2.34

2 Adjusted debt to equity = Adjusted total debt ÷ Total Eli Lilly and Company shareholders’ equity
= 26,332,700 ÷ 10,771,900 = 2.44

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Eli Lilly & Co. adjusted debt-to-equity ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 5,240,400 6,244,800 5,581,700 6,193,700 8,318,400
Total assets 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Profitability Ratio
ROA1 8.19% 12.62% 11.44% 13.28% 21.17%
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net income 5,240,400 6,244,800 5,581,700 6,193,700 8,318,400
Adjusted total assets 64,006,300 49,489,800 48,806,000 46,633,100 39,286,100
Profitability Ratio
Adjusted ROA2 8.19% 12.62% 11.44% 13.28% 21.17%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 5,240,400 ÷ 64,006,300 = 8.19%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 5,240,400 ÷ 64,006,300 = 8.19%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Eli Lilly & Co. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.