Eli Lilly & Co. (NYSE:LLY)

The financial ratios presented demonstrate notable shifts over the five-year period. Several key metrics exhibit considerable divergence between reported and adjusted values, suggesting the impact of specific accounting treatments or non-recurring items. Generally, adjusted ratios reveal a more volatile performance profile than their reported counterparts.

Asset Turnover

Reported total asset turnover remained relatively stable between 2021 and 2025, fluctuating between 0.53 and 0.58. The adjusted total asset turnover mirrored this trend initially, but showed a stronger increase in the later years, reaching 0.64 in both 2024 and 2025. This indicates that adjustments positively influence the efficiency with which assets are used to generate revenue.

Liquidity

Both the reported and adjusted current ratios followed a similar pattern. A decline from 1.23 in 2021 to 0.94 in 2023 was observed, followed by a substantial increase to 1.58 in 2025. This suggests an improving short-term liquidity position in the latter part of the period. The consistency between reported and adjusted values suggests that liquidity is not significantly impacted by the adjustments.

Leverage

Reported debt to equity increased from 1.88 in 2021 to 2.37 in 2024 before decreasing to 1.60 in 2025. However, the adjusted debt to equity ratio exhibited a much more pronounced increase, peaking at 5.54 in 2024 before falling to 2.63 in 2025. This substantial difference highlights the significant impact of adjustments on the perceived level of financial leverage. A similar pattern is observed in debt to capital, with adjusted values consistently higher than reported values, and peaking in 2024. Reported financial leverage showed moderate fluctuations, while adjusted financial leverage experienced a dramatic increase between 2022 and 2024, followed by a decrease in 2025.

Profitability

Reported net profit margin showed an initial increase from 19.71% to 21.88%, followed by a decline to 15.36% and a subsequent recovery to 31.67% in 2025. The adjusted net profit margin, however, displayed a more significant fluctuation, decreasing from 24.48% to 6.81% in 2023 before rising sharply to 31.29% in 2025. This suggests that adjustments have a considerable effect on reported profitability. The adjusted ROE and ROA also demonstrate greater volatility, with substantial increases in 2024 and 2025, indicating that adjustments positively impact these returns. Reported ROE and ROA showed more moderate changes over the period.

In summary, while reported ratios present a picture of relatively stable performance with some improvement in recent years, the adjusted ratios reveal a more dynamic and, in some cases, significantly different financial profile. The substantial differences between reported and adjusted values, particularly in leverage and profitability metrics, warrant further investigation into the nature of the adjustments being made.

The financial performance, as reflected by asset turnover ratios, demonstrates a generally stable trend with some notable increases in recent years. Revenue has exhibited consistent growth over the five-year period, while total assets have also increased, though at varying rates. A comparison of reported and adjusted total asset turnover ratios reveals differences in how efficiently assets are utilized when certain adjustments are made.

Revenue Trend

Revenue increased from US$28,318 million in 2021 to US$65,179 million in 2025. The growth was relatively modest between 2021 and 2023, with a significant acceleration in 2024 and 2025. This suggests a potential shift in the company’s sales trajectory.

Total Asset Trend

Total assets grew from US$48,806 million in 2021 to US$112,476 million in 2025. The rate of asset growth mirrored revenue growth, with a more pronounced increase observed in 2024 and 2025. This indicates that asset expansion is aligned with revenue generation.

Reported Total Asset Turnover

The reported total asset turnover ratio remained relatively stable between 0.58 and 0.61 from 2021 to 2023, before increasing to 0.57 in 2024 and 0.58 in 2025. This suggests a consistent, but not dramatically improving, level of revenue generated per dollar of total assets.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio shows a slightly different pattern. It began at 0.61 in 2021 and 2022, decreased to 0.58 in 2023, and then increased to 0.64 in both 2024 and 2025. The adjustments to total assets appear to result in a higher turnover ratio, particularly in the later years, indicating potentially more efficient asset utilization when these adjustments are considered. The consistent increase in the adjusted ratio from 2023 to 2025 is more pronounced than the reported ratio.

Comparison of Reported and Adjusted Ratios

The adjusted total asset turnover consistently exceeds the reported total asset turnover across all observed periods. This difference suggests that the adjustments made to total assets remove components that, when included, reduce the apparent efficiency of asset utilization. The magnitude of the difference between the two ratios remains relatively consistent, indicating a systematic impact from the adjustments.

In summary, the company demonstrates revenue and asset growth, with the adjusted total asset turnover ratio suggesting improved efficiency compared to the reported ratio. The accelerated growth in both revenue and assets in the later years warrants further investigation to understand the underlying drivers and sustainability of these trends.

The adjusted current ratio exhibited a period of relative stability followed by substantial improvement over the observed timeframe. Initial values remained consistent before a marked increase in later years. A comparison of the reported and adjusted current ratios reveals minimal difference, suggesting adjustments to current assets had a negligible impact on the overall ratio.

Adjusted Current Ratio - Trend Analysis

From 2021 to 2023, the adjusted current ratio remained consistent at 1.22, 1.05, and 0.94 respectively. This indicates a period of limited change in the company’s ability to cover short-term liabilities with short-term assets. A subsequent increase is observed in 2024, rising to 1.15, and continuing to 1.58 in 2025. This represents a significant strengthening of the short-term liquidity position.

Adjusted Current Assets & Liabilities Relationship

The adjusted current assets increased steadily from US$18,026 million in 2022 to US$55,586 million in 2025. Simultaneously, adjusted current liabilities also increased, but at a slower rate, rising from US$17,138 million in 2022 to US$35,228 million in 2025. This disparity in growth rates is the primary driver of the observed improvement in the adjusted current ratio.

Reported vs. Adjusted Current Ratio

The reported and adjusted current ratios are nearly identical across all periods. This suggests that the adjustments made to current assets are immaterial to the overall assessment of short-term liquidity. The consistency between the two ratios indicates that the core components of current assets and liabilities are driving the observed trends.

In summary, while the initial period showed a stable, and slightly declining, current ratio, the company experienced a notable improvement in its short-term liquidity position in the final two years of the observed period, driven by faster growth in adjusted current assets relative to adjusted current liabilities.

The reported debt to equity ratio demonstrates a generally stable trend with some fluctuation between 2021 and 2025. However, the adjusted debt to equity ratio reveals a more pronounced and volatile pattern over the same period. A significant divergence between the reported and adjusted ratios is apparent, indicating the impact of adjustments made to both debt and equity calculations.

Total Debt

Total debt exhibits a consistent upward trend from 2021 to 2025, increasing from US$16,885 million to US$42,503 million. The rate of increase accelerates notably from 2022 onwards, with substantial jumps between 2022-2023 and 2023-2024.

Total Shareholders’ Equity

Total shareholders’ equity also generally increases over the period, but with more variability. It rises from US$8,979 million in 2021 to US$26,535 million in 2025. A considerable increase is observed between 2024 and 2025, mirroring the acceleration in debt accumulation. However, equity shows a decrease between 2022 and 2023.

Reported Debt to Equity Ratio

The reported debt to equity ratio begins at 1.88 in 2021, decreases to 1.52 in 2022, and then increases to 2.37 in 2024 before declining to 1.60 in 2025. This suggests a moderate increase in financial leverage followed by a reduction, indicating potential shifts in capital structure management. The fluctuations are relatively contained.

Adjusted Total Debt

Adjusted total debt follows a similar upward trajectory to total debt, starting at US$17,570 million in 2021 and reaching US$43,865 million in 2025. The increases are generally larger than those observed in the reported total debt, suggesting the adjustments primarily affect the debt side of the equation.

Adjusted Total Equity

Adjusted total equity demonstrates a more complex pattern. It decreases from US$8,365 million in 2021 to US$5,388 million in 2023, then begins to recover, reaching US$16,651 million in 2025. This significant decline in the earlier years, followed by a substantial recovery, indicates that the equity adjustments have a considerable impact on the equity value.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio exhibits substantial volatility. It starts at 2.10 in 2021 and remains at that level in 2022. A dramatic increase is then observed, rising to 4.89 in 2023 and peaking at 5.54 in 2024. The ratio then decreases significantly to 2.63 in 2025. This pattern suggests that the adjustments to debt and equity have a combined effect of substantially increasing financial leverage, particularly in 2023 and 2024, before a partial correction in 2025. The adjusted ratio is consistently higher than the reported ratio, indicating a more leveraged position when considering these adjustments.

The considerable difference between the reported and adjusted debt to equity ratios warrants further investigation into the nature of the adjustments being made to both debt and equity. The substantial fluctuations in the adjusted ratio suggest a potentially higher level of financial risk compared to what is indicated by the reported figures.

The information presents a five-year trend of debt and capital figures, culminating in adjusted debt-to-capital ratios. Total debt and total capital both demonstrate a consistent upward trajectory from 2021 through 2025. However, the rate of increase in total debt consistently exceeds that of total capital, particularly between 2023 and 2025.

Reported Debt to Capital

The reported debt-to-capital ratio initially decreased from 0.65 in 2021 to 0.60 in 2022. It then stabilized at 0.70 for both 2023 and 2024 before decreasing slightly to 0.62 in 2025. This suggests a period of relative stability in the company’s leverage as measured by the standard calculation, followed by a minor reduction in leverage at the end of the period.

Adjusted Debt to Capital

The adjusted debt-to-capital ratio exhibits a different pattern. It remained relatively stable at 0.68 in both 2021 and 2022. A significant increase is then observed, rising to 0.83 in 2023 and peaking at 0.85 in 2024. The ratio then declines to 0.72 in 2025, though it remains higher than the levels seen in the earlier years of the period. The increase in the adjusted ratio suggests that the adjustments made to the debt and capital figures reveal a growing level of financial leverage not fully captured by the standard reported ratio.

The divergence between the reported and adjusted ratios indicates that the adjustments to total debt and total capital are having a material impact on the assessment of the company’s financial leverage. The substantial increases in both adjusted total debt and adjusted total capital between 2023 and 2025 are driving the observed trends. The fact that the adjusted debt-to-capital ratio peaked in 2024, despite continued increases in both debt and capital, suggests a shift in the composition of those figures in 2025 that partially mitigated the leverage increase.

Debt and Capital Amounts

Total debt increased from US$16.885 billion in 2021 to US$42.503 billion in 2025, representing a 151.3% increase. Total capital increased from US$25.864 billion in 2021 to US$69.038 billion in 2025, representing a 166.8% increase. Adjusted total debt increased from US$17.570 billion in 2021 to US$43.865 billion in 2025, a 149.6% increase. Adjusted total capital increased from US$25.935 billion in 2021 to US$60.516 billion in 2025, a 133.3% increase. These figures confirm the overall growth in both debt and capital, with the adjusted figures showing slightly lower percentage increases.

An examination of the financial information reveals trends in the company’s financial leverage, both as reported and as adjusted. Total assets demonstrate a consistent upward trajectory throughout the observed period, increasing from US$48,806 million in 2021 to US$112,476 million in 2025. A similar, though less pronounced, increase is evident in total shareholders’ equity, rising from US$8,979 million in 2021 to US$26,535 million in 2025.

Reported Financial Leverage

Reported financial leverage initially decreased from 5.44 in 2021 to 4.65 in 2022, suggesting a reduction in the proportion of assets financed by equity. However, it subsequently increased to 5.94 in 2023 before declining to 5.55 in 2024 and further decreasing to 4.24 in 2025. This indicates a fluctuating reliance on debt financing, with a recent trend towards lower leverage as of the end of 2025.

Adjusted Total Assets and Equity

Adjusted total assets follow a similar growth pattern to reported total assets, increasing from US$46,283 million in 2021 to US$102,474 million in 2025. However, adjusted total equity exhibits more volatility. It declines from US$8,365 million in 2021 to US$5,388 million in 2023 before increasing to US$16,651 million in 2025.

Adjusted Financial Leverage

Adjusted financial leverage shows a distinct pattern. It increased from 5.53 in 2021 to a peak of 11.25 in 2024, indicating a substantial increase in the proportion of assets financed by debt under the adjusted calculation. A significant decrease is then observed in 2025, with adjusted financial leverage falling to 6.15. This suggests that the adjustments made to total equity have a considerable impact on the calculated leverage ratio, particularly in 2024 and 2025, and that the company’s reliance on debt, as measured by this adjusted metric, peaked in 2024.

The divergence between reported and adjusted financial leverage highlights the importance of understanding the nature of the adjustments made. The substantial fluctuations in adjusted financial leverage, particularly the increase in 2023 and 2024 followed by the decrease in 2025, warrant further investigation to determine the underlying causes and their implications for the company’s financial risk profile.

The adjusted net profit margin exhibited considerable fluctuation over the five-year period. Initial values were relatively high, followed by a significant decline, and then a recovery towards levels comparable to the beginning of the period.

Adjusted Net Profit Margin - Overall Trend

The adjusted net profit margin began at 24.48% in 2021, decreased substantially to 16.06% in 2022, and experienced a marked decline to 6.81% in 2023. A recovery was then observed, with the margin increasing to 17.65% in 2024 and further to 31.29% in 2025. This represents a volatile pattern, with a clear trough in 2023 followed by substantial improvement.

Relationship to Adjusted Net Income

The fluctuations in the adjusted net profit margin correlate with changes in adjusted net income. The decrease in margin from 2021 to 2023 aligns with a decrease in adjusted net income from US$6,933 million to US$2,323 million. Conversely, the increase in margin from 2023 to 2025 corresponds with a significant increase in adjusted net income, rising from US$2,323 million to US$20,395 million.

Comparison to Reported Net Profit Margin

The adjusted net profit margin consistently differed from the reported net profit margin across all years. The adjusted margin was lower than the reported margin in 2022 and 2023, but higher in 2021, 2024, and 2025. The largest divergence occurred in 2023, where the reported margin was 15.36% and the adjusted margin was 6.81%, indicating substantial adjustments were made to net income that year. The gap narrowed in subsequent years.

Revenue Impact

Revenue increased steadily throughout the period, from US$28,318 million in 2021 to US$65,179 million in 2025. While revenue growth was consistent, the adjusted net profit margin did not follow the same trajectory, suggesting that factors beyond revenue, such as cost of goods sold or operating expenses, significantly impacted profitability. The substantial margin improvement in 2024 and 2025 occurred alongside accelerating revenue growth, indicating potential operating leverage.

The period between 2021 and 2025 demonstrates significant fluctuations in both net income and shareholders’ equity, resulting in corresponding volatility in reported and adjusted return on equity (ROE). A notable divergence emerges between the reported and adjusted ROE figures, particularly in later years, indicating the impact of adjustments made to net income and total equity.

Reported ROE

Reported ROE begins at 62.16% in 2021, decreases to 48.65% in 2023, and then experiences a substantial increase, reaching 77.78% by 2025. This pattern largely mirrors the fluctuations in net income, with a dip in 2023 coinciding with lower reported earnings and a strong rebound in subsequent years.

Adjusted ROE

Adjusted ROE exhibits a more dramatic trajectory. Starting at a high of 82.89% in 2021, it declines significantly to 43.12% in 2023. However, it then surges to 126.58% in 2024 and remains elevated at 122.49% in 2025. This substantial increase is driven by a combination of rising adjusted net income and, to a lesser extent, adjusted total equity.

Net Income Trends

Net income shows a decrease from US$6,245 million in 2022 to US$5,240 million in 2023, before experiencing a considerable increase to US$10,590 million in 2024 and further growth to US$20,640 million in 2025. The adjusted net income follows a similar pattern, but with different magnitudes, particularly in 2022 and 2023 where the adjustments result in lower values.

Equity Trends

Total shareholders’ equity generally increases over the period, from US$8,979 million in 2021 to US$26,535 million in 2025. Adjusted total equity, however, shows a decrease in 2023 to US$5,388 million before increasing to US$16,651 million in 2025. The difference between reported and adjusted equity suggests significant non-recurring items or accounting adjustments impacting the equity base.

The considerable difference between reported and adjusted ROE, especially in the later years, suggests that the adjustments to net income and equity have a substantial impact on the overall profitability assessment. The significant increase in both adjusted net income and adjusted ROE in 2024 and 2025 warrants further investigation to understand the nature of the adjustments and their sustainability.

The adjusted return on assets (ROA) exhibited fluctuating performance over the five-year period. While net income and total assets generally increased, the adjusted figures reveal a different dynamic, particularly in the earlier years. A review of the adjusted ROA alongside its components provides insight into the underlying profitability and efficiency of asset utilization.

Overall Trend

The adjusted ROA demonstrated an initial decline followed by a strong recovery. Beginning at 14.98% in 2021, it decreased to 9.82% in 2022 and further to a low of 3.98% in 2023. A substantial increase was then observed, reaching 11.25% in 2024 and culminating in 19.90% in 2025.

Adjusted Net Income Impact

Adjusted net income experienced significant volatility. It decreased from US$6,933 million in 2021 to US$4,583 million in 2022, and then sharply to US$2,323 million in 2023. Subsequent years saw considerable growth, reaching US$7,952 million in 2024 and US$20,395 million in 2025. This fluctuation directly influenced the adjusted ROA, particularly the decline observed in 2022 and 2023.

Adjusted Total Assets Impact

Adjusted total assets showed a consistent upward trend, although at varying rates. From US$46,283 million in 2021, they increased to US$46,688 million in 2022, US$58,427 million in 2023, US$70,651 million in 2024, and finally US$102,474 million in 2025. The increasing asset base, coupled with the fluctuating adjusted net income, contributed to the observed changes in adjusted ROA.

Comparison to Reported ROA

The adjusted ROA consistently differed from the reported ROA. The adjusted ROA was higher than the reported ROA in 2021 and 2022, but lower in 2023 and 2024. By 2025, the adjusted ROA and reported ROA were nearly identical. This suggests that adjustments made to net income and total assets had a material impact on the profitability metrics, particularly in the earlier periods.

The substantial increase in adjusted ROA in 2024 and 2025 appears to be driven by a combination of significant growth in adjusted net income and continued expansion of adjusted total assets. The recovery from the low point in 2023 indicates a potential improvement in the efficiency with which assets are being utilized to generate profits, following the adjustments made to the financial figures.