Eli Lilly & Co. (NYSE:LLY)

Return on Assets (ROA)

The ROA data shows a consistent presence from March 31, 2021, onwards. Initially, it registered a value of 13.28%, which slightly decreased over the next three quarters to 12.39% by December 31, 2020. There was a gradual decline to 11.44% by March 31, 2022, followed by some fluctuation with a peak of 13.06% in June 30, 2022, and a low of 8.19% by December 31, 2023. In the most recent periods, ROA improved steadily from 8.19% to a high of 13.45% by March 31, 2025. Overall, ROA reflects moderate volatility but generally remains within the range of 8% to 13.5%.

Financial Leverage (ratio)

There is a clear downward trend in financial leverage from the earliest reported period, starting from 13.35 in March 31, 2020, down to a low point of approximately 4.65 - 4.71 during the fourth quarter of 2022. After this period, leverage exhibits a mild increase and stabilizes around 5.3 to 5.67 by the most recent quarters ending March 31, 2025. This decline followed by stabilization suggests a reduction in reliance on debt or increased equity financing over time, improving the company’s financial structural risk profile.

Return on Equity (ROE)

The ROE values demonstrate a significant decrease from a peak of 109.79% in March 31, 2021 to a low around 44.46% by December 31, 2023. Post this trough, ROE shows signs of recovery, increasing to 74.62% by December 31, 2024 and slightly retreating to 70.45% by March 31, 2025. This pattern suggests considerable fluctuations in the company’s ability to generate profit from shareholders’ equity, indicating volatile profitability or changes in capital structure and earnings composition during the period.

The data reveals several important trends in profitability, efficiency, leverage, and return on equity over the observed periods.

Net Profit Margin

The net profit margin displays a general downward trend from early 2021, starting around 25.24% and declining to approximately 15.36% by the end of 2023. After this low point, there is a gradual recovery, reaching above 22% by early 2025. This pattern suggests a period of margin compression followed by stabilization and improvement.

Asset Turnover

Asset turnover ratios remain relatively stable with minor fluctuations. Values fluctuate between 0.52 and 0.62 during the entire period, indicating consistent efficiency in generating sales from assets. There is no significant upward or downward trend, suggesting stable operational performance.

Financial Leverage

Financial leverage shows a marked decrease from very high levels above 13 in early 2020 down to a plateau near 5 by 2022, maintaining levels in the 4.5 to 5.6 range thereafter. This signifies a significant reduction in the use of debt or other liabilities relative to equity, indicating a potential strategic shift toward a more conservative capital structure.

Return on Equity (ROE)

The return on equity exhibits a downward trajectory from exceedingly high values near 110% in early 2021 to about 44% by the end of 2023. This decline aligns with the reduced financial leverage, suggesting lower risk and possibly more sustainable returns. Post-2023, ROE rises again, reaching over 70% by early 2025, reflecting improved profitability and possibly a return to more effective use of equity.

Overall, the data indicates that the company experienced a phase of shrinking profit margins and returns alongside a strategic de-leveraging through 2023. Following this period, profitability and returns exhibit signs of recovery, while operational efficiency remains steady throughout. The reduced financial leverage likely contributed to the decline in ROE, but its subsequent rise implies successful adaptation to these changes and renewed growth in shareholder value.

The financial data reveals several notable trends across the analyzed periods. Initially, net profit margin showed a decline starting from 25.24% in March 2020 to 15.36% as of June 2023, indicating a reduction in profitability over that timeframe. However, from that point onward, the margin improved steadily, climbing back to 22.66% by March 2025, reflecting a restoration of profit efficiency in the most recent quarters.

Asset turnover ratios have exhibited relatively moderate fluctuations. Beginning around 0.53 to 0.58 in 2020 and early 2021, the ratio peaked at approximately 0.62 during mid-to-late 2021 but then decreased and stabilized in the range of roughly 0.52 to 0.57. This pattern suggests the company maintained a consistent level of revenue generation relative to its asset base, with no major expansions or contractions in asset utilization efficiency.

Return on assets (ROA) followed a somewhat parallel trajectory as net profit margin, starting at a high of over 13% in early 2020 and declining gradually to below 9% by late 2023. Subsequently, ROA recovered to reach above 12% by early 2025. This recovery indicates an enhancement in overall asset profitability aligning with the improved net profit margins during the later periods. The decline and subsequent improvement suggest phases of operational challenges followed by effective management or market condition improvements.

Net Profit Margin

Displayed a downward trend through mid-2023, followed by a notable recovery through early 2025.

Asset Turnover

Remained relatively stable throughout the period, with moderate peaks near mid-2021 and stabilization thereafter.

Return on Assets (ROA)

Decreased in the initial years but experienced recovery after mid-2023, tracking closely with net profit margin trends.

Overall, the data portrays a company that experienced a phase of diminishing profitability and asset returns, but later demonstrated resilience and improvement in financial efficiency and profitability metrics. The stable asset turnover indicates steady operational activity despite fluctuations in profitability measures.