Eli Lilly & Co. (NYSE:LLY)

The analysis of the presented financial data reveals a clear upward trend in both current assets and adjusted current assets over the five-year period from December 31, 2020, to December 31, 2024.

Current Assets

The value of current assets has consistently increased each year, rising from approximately 17,462,100 thousand US dollars at the end of 2020 to 32,739,700 thousand US dollars by the end of 2024. The most significant growth appears between 2022 and 2023, where current assets increased sharply by roughly 7.2 billion US dollars.

Adjusted Current Assets

Adjusted current assets exhibit a very similar pattern to current assets, starting at approximately 17,453,200 thousand US dollars in 2020 and reaching 32,691,700 thousand US dollars in 2024. The difference between current assets and adjusted current assets remains minimal, suggesting few adjustments were necessary in this period. The growth rate in adjusted current assets mirrors that of current assets, with a pronounced increase in the later years, particularly between 2022 and 2023.

The consistent increase in both current and adjusted current assets indicates an expansion in the company's short-term resource base, potentially enhancing liquidity and operational flexibility. The close alignment between current assets and adjusted current assets suggests stability in asset valuation methods or adjustments applied during the period.

The analysis of the financial data over the five-year period reveals a consistent upward trend in both total assets and adjusted total assets.

Total Assets

The total assets increased from 46,633,100 thousand US dollars in 2020 to 78,714,900 thousand US dollars in 2024. This represents a substantial increase, suggesting significant growth in the company’s asset base. Notably, the most pronounced increase occurred between 2022 and 2023, where total assets jumped from approximately 49,489,800 to 64,006,300 thousand US dollars. The upward trend continued into 2024 with an increase of over 14 billion US dollars.

Adjusted Total Assets

Adjusted total assets mirrored the trend observed in total assets, growing steadily from 43,793,800 thousand US dollars in 2020 to 70,666,300 thousand US dollars in 2024. This metric also experienced a significant increase in 2023, rising from about 46,704,000 to 58,441,400 thousand US dollars, and continued to climb in 2024. The adjusted figures consistently remain below the total assets, reflecting adjustments likely related to valuation or accounting considerations.

Overall, both metrics demonstrate a robust growth trend during the reported period. The marked increases, especially from 2022 onwards, may indicate strategic investments, acquisitions, or organic growth contributing to the expansion of the asset base. The consistent gap between total and adjusted assets suggests ongoing adjustments that temper the reported asset value but still confirm expanding resources.

Total liabilities

The total liabilities increased from approximately 40.8 billion US dollars at the end of 2020 to 64.4 billion US dollars by the end of 2024. There was a slight decline from 40.8 billion in 2020 to 38.7 billion in 2022, followed by a significant increase reaching 53.1 billion in 2023 and further rising to 64.4 billion in 2024. This indicates a substantial escalation in the company's obligations in the latter two years.

Adjusted total liabilities

Adjusted total liabilities mirrored the general trend of total liabilities, beginning at around 38.7 billion US dollars in 2020, decreasing modestly to 38.6 billion in 2022, then sharply increasing to 53.0 billion in 2023, and finally reaching 64.4 billion in 2024. The adjustment consistently results in slightly lower liability figures compared to total liabilities but shows a parallel trajectory throughout the period.

General observations

The company's total and adjusted total liabilities remained relatively stable with slight declines during the initial three years (2020-2022). From 2023 onwards, there is a notable upward trend, with liabilities increasing by approximately 66% between 2022 and 2024. This suggests an expansion in borrowing or obligations, which might be linked to strategic initiatives, investment activities, or changes in capital structure.

Implications

The marked increase in liabilities in the recent years calls for a thorough assessment of the company's leverage, liquidity, and risk management strategies. The close alignment between total and adjusted liabilities indicates consistency in the accounting adjustments applied, maintaining transparency in reported obligations.

The data reveals significant movements in the equity measures of the company from 2020 through 2024. Over the five-year span, total shareholders' equity has exhibited a strong upward trajectory. Starting at 5,641,600 thousand US dollars in 2020, it increased sharply by 59% to 8,979,200 thousand in 2021, followed by continued growth reaching 14,192,100 thousand by 2024. This represents an overall growth of approximately 151% across the period, indicating a substantial strengthening of the company’s net assets and potentially reflecting retained earnings accumulation, capital injections, or revaluation gains.

Contrasting with the total equity trend, adjusted total equity shows a more volatile and declining pattern. In 2020, adjusted total equity was 5,085,800 thousand US dollars, rising significantly to 8,387,200 thousand in 2021, mirroring the increase seen in total equity. However, from 2021 onward, adjusted equity declined sharply to 8,076,800 thousand in 2022 and continued decreasing to 5,402,700 thousand in 2023 before a moderate recovery to 6,296,900 thousand in 2024. This downward trend in adjusted equity, particularly the steep decreases during 2022 and 2023, may suggest adjustments for factors such as goodwill impairment, intangible asset write-downs, or other accounting reclassifications that adversely impacted the company's equity base when considering these adjustments.

The gap between total shareholders' equity and adjusted total equity widened considerably over the analysis period. While total equity nearly tripled, adjusted equity experienced a net increase of only about 24% from 2020 to 2024. This divergence signals that adjustments affecting the equity base have become more significant, potentially reflecting increased intangible assets or other non-equity components that are excluded in the adjusted equity calculation.

Overall, the strong growth in total shareholders’ equity indicates solid financial expansion and possibly enhanced shareholder value, whereas the fluctuations and decline in adjusted equity underscore the importance of analyzing underlying adjustments to better understand the quality and composition of the company's equity. The trends suggest a need for careful attention to the components excluded from adjusted equity to fully assess financial stability and capital adequacy.

Total reported debt

The total reported debt shows an overall increasing trend from 16,595,300 thousand US dollars in 2020 to 33,644,200 thousand US dollars in 2024. There is a slight decline observed in 2022 reaching 16,238,600 thousand US dollars before rising sharply in 2023 and continuing to increase in 2024, nearly doubling from the corresponding 2020 figure.

Total shareholders’ equity

Shareholders’ equity consistently increased from 5,641,600 thousand US dollars in 2020 to 14,192,100 thousand US dollars in 2024. The growth appears steady, with the most significant year-over-year increase between 2023 and 2024.

Total reported capital

Total reported capital also demonstrates a continuous upward progression from 22,236,900 thousand US dollars in 2020 to 47,836,300 thousand US dollars in 2024. This trend aligns with increases in both debt and shareholders’ equity, indicating expansion in the company’s capital structure.

Adjusted total debt

Adjusted total debt evolves similarly to reported debt, increasing from 17,259,000 thousand US dollars in 2020 to 34,790,800 thousand US dollars in 2024. A slight dip is noted in 2022 (16,966,800 thousand) before a significant rise in subsequent years. The adjusted figures are consistently higher than the reported debt, suggesting that some debt components are considered differently under adjustment.

Adjusted total equity

Adjusted total equity reveals a different pattern compared to reported equity. It rises from 5,085,800 thousand US dollars in 2020 to a peak in 2021 at 8,387,200 thousand, then declines sharply in 2023 to 5,402,700 thousand US dollars before a modest recovery in 2024 to 6,296,900 thousand US dollars. This volatility contrasts with the more stable growth in reported equity and may reflect adjustments reflecting changes in valuation or accounting treatment of equity items.

Adjusted total capital

Adjusted total capital shows an increase from 22,344,800 thousand US dollars in 2020 to 41,087,700 thousand US dollars in 2024, although the trajectory is less smooth than the reported total capital. The adjusted capital peaked in 2021, dipped in 2022 and 2023, before rising again in 2024. This suggests some underlying fluctuations in adjusted components of debt or equity during these years.

Net Income

The net income showed fluctuations over the five-year period. It started at approximately 6.19 billion US dollars in 2020, decreased to about 5.58 billion in 2021, then increased again to roughly 6.24 billion in 2022. However, in 2023, net income dropped to around 5.24 billion, before significantly rising to an estimated 10.59 billion in 2024. This pattern indicates periods of both contraction and growth, with a notable surge in the last reported year.

Adjusted Net Income

Adjusted net income displayed a somewhat more volatile trend. It began slightly below net income at around 6.11 billion US dollars in 2020, increased to approximately 6.93 billion in 2021, but then experienced a sharp decline to about 4.58 billion in 2022. The decline continued in 2023, reaching a low of roughly 2.32 billion, followed by a rebound to about 7.95 billion in 2024. This indicates significant adjustments or non-recurring factors affecting profitability, with the adjusted figure recovering substantially in the final year.

Comparative Insights

Considering both net income and adjusted net income, the data suggests the company faced financial challenges particularly in 2022 and 2023 as reflected by lower profitability, especially in adjusted terms. The dramatic improvement in both metrics in 2024 points to possible operational improvements, favorable market conditions, or one-time gains. The divergence in patterns between net income and adjusted net income across the years highlights the impact of adjustments on reported profits and underscores the importance of evaluating both metrics for a comprehensive view of financial performance.