Analysis of Liquidity Ratios

Beginner level

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

Eli Lilly & Co., liquidity ratios

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Current ratio	1.16	1.73	1.32	1.37	1.53
Quick ratio	0.68	1.20	0.91	0.98	1.04
Cash ratio	0.21	0.68	0.55	0.55	0.54

Liquidity ratio	Description	The company
Current ratio	A liquidity ratio calculated as current assets divided by current liabilities.	Eli Lilly & Co.’s current ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
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 improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
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 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

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

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in thousands)
Current assets	13,709,600	20,549,600	19,202,100	15,101,400	12,573,600
Current liabilities	11,775,200	11,888,100	14,535,900	10,986,600	8,229,600
Liquidity Ratio
Current ratio¹	1.16	1.73	1.32	1.37	1.53
Benchmarks
Current Ratio, Competitors²
Abbott Laboratories	1.44	1.62	2.26	4.02	1.54
AbbVie Inc.	3.18	0.98	1.28	1.65	1.50
Amgen Inc.	1.44	2.79	5.49	4.11	4.44
Biogen Inc.	1.72	2.32	2.34	2.55	2.60
Bristol-Myers Squibb Co.	1.60	1.61	1.55	1.55	1.30
Gilead Sciences Inc.	3.10	3.38	2.74	2.22	2.50
Illumina Inc.	6.69	2.49	3.99	3.29	3.43
Johnson & Johnson	1.26	1.47	1.41	2.47	2.17
Merck & Co. Inc.	1.24	1.17	1.33	1.78	1.55
Pfizer Inc.	0.88	1.57	1.35	1.25	1.49
Regeneron Pharmaceuticals Inc.	3.67	4.47	3.82	2.56	3.59
Vertex Pharmaceuticals Inc.	3.61	3.43	3.28	2.31	2.78
Zoetis Inc.	2.63	3.60	3.85	3.03	2.15
Current Ratio, Sector
Pharmaceuticals & Biotechnology	1.58	1.74	1.83	2.11	1.94
Current Ratio, Industry
Health Care	1.49	1.53	1.62	1.76	1.72

¹ 2019 Calculation
Current ratio = Current assets ÷ Current liabilities
= 13,709,600 ÷ 11,775,200 = 1.16

² Click competitor name to see calculations.

Liquidity ratio	Description	The company
Current ratio	A liquidity ratio calculated as current assets divided by current liabilities.	Eli Lilly & Co.’s current ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

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

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in thousands)
Cash and cash equivalents	2,337,500	7,998,200	6,536,200	4,582,100	3,666,400
Short-term investments	101,000	88,200	1,497,900	1,456,500	785,400
Accounts receivable, net of allowances	4,547,300	5,246,500	4,546,300	4,029,400	3,513,000
Other receivables	994,200	958,400	715,900	736,900	558,600
Total quick assets	7,980,000	14,291,300	13,296,300	10,804,900	8,523,400

Current liabilities	11,775,200	11,888,100	14,535,900	10,986,600	8,229,600
Liquidity Ratio
Quick ratio¹	0.68	1.20	0.91	0.98	1.04
Benchmarks
Quick Ratio, Competitors²
Abbott Laboratories	0.88	1.03	1.67	3.31	1.04
AbbVie Inc.	2.91	0.78	0.89	1.14	1.21
Amgen Inc.	1.01	2.44	4.98	3.68	3.97
Biogen Inc.	1.43	1.83	1.78	1.94	1.93
Bristol-Myers Squibb Co.	1.26	1.37	1.30	1.27	1.05
Gilead Sciences Inc.	2.86	3.15	2.52	1.78	2.07
Illumina Inc.	6.00	2.23	3.43	2.75	2.90
Johnson & Johnson	0.94	1.08	1.04	2.04	1.77
Merck & Co. Inc.	0.78	0.72	0.83	1.24	1.04
Pfizer Inc.	0.50	0.84	0.93	0.84	1.07
Regeneron Pharmaceuticals Inc.	2.81	3.50	2.98	2.13	3.10
Vertex Pharmaceuticals Inc.	3.33	3.19	2.94	2.06	2.41
Zoetis Inc.	1.67	2.24	2.34	1.47	1.17
Quick Ratio, Sector
Pharmaceuticals & Biotechnology	1.19	1.29	1.41	1.65	1.51
Quick Ratio, Industry
Health Care	1.13	1.12	1.24	1.36	1.32

¹ 2019 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 7,980,000 ÷ 11,775,200 = 0.68

² Click competitor name to see calculations.

Liquidity 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 improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

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

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in thousands)
Cash and cash equivalents	2,337,500	7,998,200	6,536,200	4,582,100	3,666,400
Short-term investments	101,000	88,200	1,497,900	1,456,500	785,400
Total cash assets	2,438,500	8,086,400	8,034,100	6,038,600	4,451,800

Current liabilities	11,775,200	11,888,100	14,535,900	10,986,600	8,229,600
Liquidity Ratio
Cash ratio¹	0.21	0.68	0.55	0.55	0.54
Benchmarks
Cash Ratio, Competitors²
Abbott Laboratories	0.38	0.45	1.08	2.82	0.67
AbbVie Inc.	2.56	0.47	0.59	0.66	0.77
Amgen Inc.	0.69	2.17	4.62	3.40	3.62
Biogen Inc.	0.92	1.07	1.10	1.43	1.33
Bristol-Myers Squibb Co.	0.84	0.83	0.71	0.72	0.53
Gilead Sciences Inc.	2.50	2.84	2.19	1.29	1.48
Illumina Inc.	5.13	1.95	2.88	2.21	2.27
Johnson & Johnson	0.54	0.63	0.60	1.59	1.38
Merck & Co. Inc.	0.47	0.40	0.46	0.83	0.70
Pfizer Inc.	0.26	0.59	0.66	0.57	0.79
Regeneron Pharmaceuticals Inc.	1.53	1.95	1.24	0.84	1.29
Vertex Pharmaceuticals Inc.	2.85	2.83	2.59	1.81	2.06
Zoetis Inc.	1.07	1.39	1.43	0.65	0.65
Cash Ratio, Sector
Pharmaceuticals & Biotechnology	0.82	0.90	1.01	1.24	1.11
Cash Ratio, Industry
Health Care	0.73	0.72	0.85	0.95	0.92

¹ 2019 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,438,500 ÷ 11,775,200 = 0.21

² Click competitor name to see calculations.

Liquidity 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 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Eli Lilly & Co. (NYSE:LLY)