Eli Lilly & Co. (LLY)

Liquidity Analysis

Difficulty: Beginner

Liquidity ratios measure the company’s ability to meet its short-term obligations.

Eli Lilly & Co., liquidity ratios

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Current ratio	1.73	1.32	1.37	1.53	1.09
Quick ratio	1.20	0.91	0.98	1.04	0.77
Cash ratio	0.68	0.55	0.55	0.54	0.43

Ratio	Description	The company
Current ratio	A liquidity ratio calculated as current assets divided by current liabilities.	Eli Lilly & Co.’s current ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Quick ratio	A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities.	Eli Lilly & Co.’s quick ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Cash ratio	A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities.	Eli Lilly & Co.’s cash ratio improved from 2016 to 2017 and from 2017 to 2018.

Eli Lilly & Co., current ratio calculation, comparison to benchmarks

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Selected Financial Data (USD $ in thousands)
Current assets	20,549,600	19,202,100	15,101,400	12,573,600	12,179,800
Current liabilities	11,888,100	14,535,900	10,986,600	8,229,600	11,207,500
Ratio
Current ratio¹	1.73	1.32	1.37	1.53	1.09
Benchmarks
Current Ratio, Competitors
Abbott Laboratories	1.62	2.26	4.02	1.54	1.45
AbbVie Inc.	0.98	1.28	1.65	1.50	1.41
Allergan PLC	1.13	1.16	2.27	1.03	1.37
Amgen Inc.	2.79	5.49	4.11	4.44	4.95
Biogen Inc.	2.32	2.34	2.55	2.60	2.11
Bristol-Myers Squibb Co.	1.61	1.55	1.55	1.30	1.73
Celgene Corp.	2.23	4.99	3.67	4.77	4.60
Gilead Sciences Inc.	3.38	2.74	2.22	2.50	3.07
Johnson & Johnson	1.47	1.41	2.47	2.17	2.36
Merck & Co. Inc.	1.17	1.33	1.78	1.55	1.77
Pfizer Inc.	1.57	1.35	1.25	1.49	2.67
Regeneron Pharmaceuticals Inc.	4.47	3.82	2.56	3.59	3.31
Current Ratio, Sector
Pharmaceuticals & Biotechnology	1.70	1.82	2.14	1.92	2.19
Current Ratio, Industry
Health Care	1.52	1.64	1.83	1.73	1.98

2018 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= 20,549,600 ÷ 11,888,100 = 1.73

Ratio	Description	The company
Current ratio	A liquidity ratio calculated as current assets divided by current liabilities.	Eli Lilly & Co.’s current ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Eli Lilly & Co., quick ratio calculation, comparison to benchmarks

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Selected Financial Data (USD $ in thousands)
Cash and cash equivalents	7,998,200	6,536,200	4,582,100	3,666,400	3,871,600
Short-term investments	88,200	1,497,900	1,456,500	785,400	955,400
Accounts receivable, net of allowances	5,246,500	4,546,300	4,029,400	3,513,000	3,234,600
Other receivables	958,400	715,900	736,900	558,600	566,700
Total quick assets	14,291,300	13,296,300	10,804,900	8,523,400	8,628,300
Current liabilities	11,888,100	14,535,900	10,986,600	8,229,600	11,207,500
Ratio
Quick ratio¹	1.20	0.91	0.98	1.04	0.77
Benchmarks
Quick Ratio, Competitors
Abbott Laboratories	1.03	1.67	3.31	1.04	0.76
AbbVie Inc.	0.78	0.89	1.14	1.21	1.06
Allergan PLC	0.83	0.95	2.00	0.42	0.52
Amgen Inc.	2.44	4.98	3.68	3.97	4.22
Biogen Inc.	1.83	1.78	1.94	1.93	1.54
Bristol-Myers Squibb Co.	1.37	1.30	1.27	1.05	1.26
Celgene Corp.	2.00	4.67	3.24	4.05	4.13
Gilead Sciences Inc.	3.15	2.52	1.78	2.07	2.56
Johnson & Johnson	1.08	1.04	2.04	1.77	1.76
Merck & Co. Inc.	0.72	0.83	1.24	1.04	1.19
Pfizer Inc.	0.84	0.93	0.84	1.07	2.07
Regeneron Pharmaceuticals Inc.	3.50	2.98	2.13	3.10	2.93
Quick Ratio, Sector
Pharmaceuticals & Biotechnology	1.27	1.42	1.69	1.48	1.63
Quick Ratio, Industry
Health Care	1.13	1.29	1.44	1.33	1.48

2018 Calculations

¹ Quick ratio = Total quick assets ÷ Current liabilities
= 14,291,300 ÷ 11,888,100 = 1.20

Ratio	Description	The company
Quick ratio	A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities.	Eli Lilly & Co.’s quick ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Eli Lilly & Co., cash ratio calculation, comparison to benchmarks

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Selected Financial Data (USD $ in thousands)
Cash and cash equivalents	7,998,200	6,536,200	4,582,100	3,666,400	3,871,600
Short-term investments	88,200	1,497,900	1,456,500	785,400	955,400
Total cash assets	8,086,400	8,034,100	6,038,600	4,451,800	4,827,000
Current liabilities	11,888,100	14,535,900	10,986,600	8,229,600	11,207,500
Ratio
Cash ratio¹	0.68	0.55	0.55	0.54	0.43
Benchmarks
Cash Ratio, Competitors
Abbott Laboratories	0.45	1.08	2.82	0.67	0.42
AbbVie Inc.	0.47	0.59	0.66	0.77	0.73
Allergan PLC	0.33	0.65	1.68	0.13	0.05
Amgen Inc.	2.17	4.62	3.40	3.62	3.86
Biogen Inc.	1.07	1.10	1.43	1.33	0.83
Bristol-Myers Squibb Co.	0.83	0.71	0.72	0.53	0.88
Celgene Corp.	1.49	4.03	2.69	3.33	3.57
Gilead Sciences Inc.	2.84	2.19	1.29	1.48	1.76
Johnson & Johnson	0.63	0.60	1.59	1.38	1.32
Merck & Co. Inc.	0.40	0.46	0.83	0.70	0.84
Pfizer Inc.	0.59	0.66	0.57	0.79	1.67
Regeneron Pharmaceuticals Inc.	1.95	1.24	0.84	1.29	1.38
Cash Ratio, Sector
Pharmaceuticals & Biotechnology	0.87	1.03	1.29	1.08	1.21
Cash Ratio, Industry
Health Care	0.73	0.90	1.03	0.94	1.07

2018 Calculations

¹ Cash ratio = Total cash assets ÷ Current liabilities
= 8,086,400 ÷ 11,888,100 = 0.68

Ratio	Description	The company
Cash ratio	A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities.	Eli Lilly & Co.’s cash ratio improved from 2016 to 2017 and from 2017 to 2018.