Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Eli Lilly & Co., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.15 | 0.94 | 1.05 | 1.23 | 1.40 | |
| Quick ratio | 0.59 | 0.52 | 0.63 | 0.80 | 0.85 | |
| Cash ratio | 0.12 | 0.11 | 0.13 | 0.26 | 0.29 |
Based on: 10-K (reporting date: 2024-12-31), 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).
The analysis of liquidity ratios over the five-year period reveals a general downward trend, followed by a slight improvement in the final year.
- Current Ratio
- The current ratio decreased consistently from 1.4 in 2020 to a low of 0.94 in 2023, indicating a diminishing ability to cover current liabilities with current assets over these years. However, there was a modest recovery to 1.15 in 2024, suggesting a partial restoration of short-term financial stability.
- Quick Ratio
- The quick ratio showed a similar downward trajectory, declining from 0.85 in 2020 to 0.52 in 2023. This mirrored the reduced liquidity trend noted in the current ratio but was slightly less pronounced in the recovery year, improving to 0.59 in 2024. This indicates a continued, though slightly improved, short-term liquidity position when inventories are excluded.
- Cash Ratio
- The cash ratio declined sharply from 0.29 in 2020 to 0.11 in 2023, showing a significant reduction in the most liquid assets available to cover current liabilities. The ratio experienced a slight increase to 0.12 in 2024, but it remained at a relatively low level compared to the beginning of the period.
Overall, the data suggests a weakening in liquidity from 2020 through 2023, reflected consistently across all measures. The slight improvements in 2024 may indicate measures taken to strengthen liquidity, but the company still operates with lower liquidity buffers compared to the start of the period. The decline in cash and quick ratios points to a reduced capacity to meet short-term obligations without relying on inventory sales.
Current Ratio
Eli Lilly & Co., current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 32,739,700) | 25,727,000) | 18,034,500) | 18,452,400) | 17,462,100) | |
| Current liabilities | 28,376,600) | 27,293,200) | 17,138,200) | 15,052,700) | 12,481,600) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.15 | 0.94 | 1.05 | 1.23 | 1.40 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.66 | 0.87 | 0.96 | 0.79 | 0.84 | |
| Amgen Inc. | 1.26 | 1.65 | 1.41 | 1.59 | 1.81 | |
| Bristol-Myers Squibb Co. | 1.25 | 1.43 | 1.25 | 1.52 | 1.58 | |
| Danaher Corp. | 1.40 | 1.68 | 1.89 | 1.43 | 1.86 | |
| Gilead Sciences Inc. | 1.60 | 1.43 | 1.29 | 1.27 | 1.40 | |
| Johnson & Johnson | 1.11 | 1.16 | 0.99 | 1.35 | 1.21 | |
| Merck & Co. Inc. | 1.36 | 1.25 | 1.47 | 1.27 | 1.02 | |
| Pfizer Inc. | 1.17 | 0.91 | 1.22 | 1.40 | 1.35 | |
| Regeneron Pharmaceuticals Inc. | 4.73 | 5.69 | 5.06 | 3.56 | 3.63 | |
| Thermo Fisher Scientific Inc. | 1.66 | 1.75 | 1.48 | 1.50 | 2.13 | |
| Vertex Pharmaceuticals Inc. | 2.69 | 3.99 | 4.83 | 4.46 | 4.33 | |
| Current Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.24 | 1.27 | 1.30 | 1.36 | 1.37 | |
| Current Ratio, Industry | ||||||
| Health Care | 1.14 | 1.17 | 1.19 | 1.24 | 1.24 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 32,739,700 ÷ 28,376,600 = 1.15
2 Click competitor name to see calculations.
- Current Assets
- Current assets exhibited a general upward trend over the five-year period. The value increased from approximately 17.5 billion USD at the end of 2020 to over 32.7 billion USD by the end of 2024. A notable acceleration in growth occurred between 2022 and 2024, where current assets expanded significantly.
- Current Liabilities
- Current liabilities also increased steadily during the review period, growing from about 12.5 billion USD in 2020 to roughly 28.4 billion USD at the close of 2024. The rise was particularly sharp between 2022 and 2023, mirroring the surge in current assets.
- Current Ratio
- The current ratio declined from 1.4 in 2020 to a low of 0.94 in 2023, indicating a decrease in short-term liquidity during these years. However, by 2024, the ratio improved to 1.15, suggesting a partial recovery in the company's ability to cover its current liabilities with current assets. Despite this recovery, the ratio remained below the initial 2020 level, which may suggest cautious attention to liquidity management is warranted.
Quick Ratio
Eli Lilly & Co., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 3,268,400) | 2,818,600) | 2,067,000) | 3,818,500) | 3,657,100) | |
| Short-term investments | 154,800) | 109,100) | 144,800) | 90,100) | 24,200) | |
| Accounts receivable, net of allowances | 11,005,700) | 9,090,500) | 6,896,000) | 6,672,800) | 5,875,300) | |
| Other receivables | 2,269,700) | 2,245,700) | 1,662,900) | 1,454,400) | 1,053,700) | |
| Total quick assets | 16,698,600) | 14,263,900) | 10,770,700) | 12,035,800) | 10,610,300) | |
| Current liabilities | 28,376,600) | 27,293,200) | 17,138,200) | 15,052,700) | 12,481,600) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.59 | 0.52 | 0.63 | 0.80 | 0.85 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.43 | 0.63 | 0.69 | 0.56 | 0.60 | |
| Amgen Inc. | 0.81 | 0.99 | 0.95 | 1.06 | 1.30 | |
| Bristol-Myers Squibb Co. | 0.91 | 1.04 | 0.87 | 1.20 | 1.28 | |
| Danaher Corp. | 0.83 | 1.18 | 1.30 | 0.89 | 1.36 | |
| Gilead Sciences Inc. | 1.20 | 1.06 | 0.99 | 0.95 | 1.08 | |
| Johnson & Johnson | 0.78 | 0.82 | 0.71 | 1.04 | 0.91 | |
| Merck & Co. Inc. | 0.84 | 0.68 | 0.93 | 0.73 | 0.58 | |
| Pfizer Inc. | 0.74 | 0.50 | 0.80 | 1.00 | 0.78 | |
| Regeneron Pharmaceuticals Inc. | 3.86 | 4.82 | 4.16 | 2.98 | 2.86 | |
| Thermo Fisher Scientific Inc. | 1.14 | 1.27 | 1.06 | 1.00 | 1.63 | |
| Vertex Pharmaceuticals Inc. | 2.17 | 3.60 | 4.46 | 4.04 | 4.02 | |
| Quick Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.82 | 0.85 | 0.91 | 0.98 | 0.98 | |
| Quick Ratio, Industry | ||||||
| Health Care | 0.83 | 0.85 | 0.88 | 0.93 | 0.91 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 16,698,600 ÷ 28,376,600 = 0.59
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets exhibited a fluctuating but overall increasing trend over the five-year period. Starting at approximately 10.6 billion US dollars at the end of 2020, the value rose to around 12.0 billion by the end of 2021. This was followed by a decline to about 10.8 billion in 2022. Notably, there was a significant rebound in 2023 to nearly 14.3 billion, continuing upward to reach approximately 16.7 billion by the end of 2024. This movement suggests periods of investment or liquid asset management changes, including a strong increase in available liquid assets in the later years.
- Current liabilities
- Current liabilities showed a consistent upward trend through the period under review. Beginning at about 12.5 billion US dollars in 2020, liabilities increased steadily each year, reaching 15.1 billion in 2021 and 17.1 billion in 2022. A marked jump occurred in 2023, with current liabilities rising sharply to approximately 27.3 billion, followed by a slight increase to 28.4 billion by the end of 2024. This indicates a growing short-term obligation burden, particularly notable after 2022, potentially reflecting increased operational costs or financing activities.
- Quick ratio
- The quick ratio demonstrated a declining trend over the five-year timeframe, indicating a decreasing ability to cover current liabilities with the most liquid assets. Starting with a ratio of 0.85 in 2020, the quick ratio decreased to 0.80 in 2021 and further dropped to a low of 0.63 in 2022. The decline continued to 0.52 in 2023, before experiencing a slight recovery to 0.59 in 2024. The consistent ratio below 1.0 throughout suggests that quick assets were insufficient to cover current liabilities during this period, raising potential liquidity concerns despite the increase in quick assets in nominal terms.
Cash Ratio
Eli Lilly & Co., cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 3,268,400) | 2,818,600) | 2,067,000) | 3,818,500) | 3,657,100) | |
| Short-term investments | 154,800) | 109,100) | 144,800) | 90,100) | 24,200) | |
| Total cash assets | 3,423,200) | 2,927,700) | 2,211,800) | 3,908,600) | 3,681,300) | |
| Current liabilities | 28,376,600) | 27,293,200) | 17,138,200) | 15,052,700) | 12,481,600) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.12 | 0.11 | 0.13 | 0.26 | 0.29 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| AbbVie Inc. | 0.14 | 0.34 | 0.31 | 0.28 | 0.30 | |
| Amgen Inc. | 0.52 | 0.60 | 0.59 | 0.66 | 0.91 | |
| Bristol-Myers Squibb Co. | 0.46 | 0.55 | 0.42 | 0.78 | 0.83 | |
| Danaher Corp. | 0.31 | 0.71 | 0.71 | 0.32 | 0.82 | |
| Gilead Sciences Inc. | 0.83 | 0.64 | 0.57 | 0.56 | 0.65 | |
| Johnson & Johnson | 0.49 | 0.50 | 0.42 | 0.70 | 0.59 | |
| Merck & Co. Inc. | 0.48 | 0.28 | 0.54 | 0.34 | 0.30 | |
| Pfizer Inc. | 0.48 | 0.27 | 0.54 | 0.73 | 0.47 | |
| Regeneron Pharmaceuticals Inc. | 2.28 | 3.17 | 2.46 | 1.45 | 1.33 | |
| Thermo Fisher Scientific Inc. | 0.42 | 0.58 | 0.50 | 0.33 | 1.00 | |
| Vertex Pharmaceuticals Inc. | 1.72 | 3.16 | 3.93 | 3.51 | 3.55 | |
| Cash Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.45 | 0.47 | 0.52 | 0.58 | 0.59 | |
| Cash Ratio, Industry | ||||||
| Health Care | 0.41 | 0.44 | 0.49 | 0.54 | 0.53 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 3,423,200 ÷ 28,376,600 = 0.12
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets demonstrated notable fluctuations over the five-year period. Beginning at 3,681,300 thousand US dollars in 2020, the cash assets increased slightly to 3,908,600 in 2021. However, there was a significant decline in 2022, dropping to 2,211,800. Following this low point, cash assets recovered somewhat in the subsequent years, reaching 2,927,700 in 2023 and further improving to 3,423,200 by 2024.
- Current liabilities
- Current liabilities displayed a consistent upward trend throughout the analyzed timeframe. Starting from 12,481,600 thousand US dollars in 2020, liabilities increased steadily each year, reaching 15,052,700 in 2021 and 17,138,200 in 2022. The rise accelerated thereafter, with liabilities surging to 27,293,200 in 2023 and further increasing to 28,376,600 by 2024, indicating a substantial growth in short-term obligations.
- Cash ratio
- The cash ratio, which measures the company's ability to cover current liabilities with its most liquid assets, exhibited a clear declining trend. From 0.29 in 2020, the ratio slightly decreased to 0.26 in 2021, followed by a sharper drop to 0.13 in 2022. The ratio further declined to 0.11 in 2023 and marginally improved to 0.12 in 2024, signifying progressively lower liquidity relative to current liabilities over the period, despite minor recovery in the last year.