Eli Lilly & Co. (NYSE:LLY)

Debt to Equity

The debt to equity ratio exhibits a clear downward trend from March 2020 (5.6) to December 2021 (1.88), indicating a significant reduction in the company's reliance on debt relative to equity during this period. From early 2022 onward, the ratio stabilizes somewhat but shows a moderate increase, reaching 2.44 by June 2025. This suggests a gradual increase in leverage after the initial deleveraging phase.

Debt to Capital

The debt to capital ratio decreases steadily from 0.85 in March 2020 to a low of 0.60 in December 2022, reflecting a decreasing proportion of debt in the company's capital structure. After this low point, the ratio experiences slight fluctuations but generally trends upward again, reaching around 0.69 by mid-2025. This pattern parallels the behavior observed in the debt to equity ratio, illustrating some re-leveraging after a period of reduction.

Debt to Assets

The debt to assets ratio remains relatively stable over the entire period, fluctuating between 0.33 and 0.43. The ratio declines slightly from 0.42 in March 2020 to around 0.33 by the end of 2022, indicating a modest reduction in debt relative to total assets. Post-2022, the ratio trends upward again, culminating near 0.43 by June 2025, suggesting a partial reversal of the earlier deleveraging in terms of asset coverage.

Financial Leverage

Financial leverage decreases from a high of 13.35 in March 2020 to approximately 4.65 by December 2022. This significant decline denotes a reduction in the proportion of total assets financed by equity, consistent with lower leverage levels. From 2023 onwards, financial leverage exhibits a modest upward movement, rising back to around 5.52 by mid-2025. This increase supports the observations from other debt-related ratios, indicating a slight increase in leverage after the initial reduction.

Total Debt

The total debt values exhibit fluctuations over the examined periods with an overall upward trend. Initially, the debt decreased from approximately 17.2 billion in March 2020 to around 16.2 billion in March 2021, then experienced some increases and decreases until the end of 2022. Starting from March 2023, there is a significant and sustained rise in total debt, reaching nearly 40 billion by June 2025, indicating a marked increase in the company's leverage over recent quarters.

Total Shareholders’ Equity

Shareholders’ equity grew steadily from about 3.1 billion in March 2020 to over 11.2 billion by March 2023. However, from mid-2023 onward, equity values show some volatility, including a slight decline followed by a recovery, eventually reaching approximately 18.3 billion by June 2025. This suggests periodic adjustments or fluctuations in retained earnings or other equity components but an overall growth trajectory.

Debt to Equity Ratio

The debt to equity ratio indicates a clear downward trend from March 2020 (5.6) through March 2021 (2.35), reflecting a reduction in relative leverage. From mid-2021 to late 2022, this ratio remained relatively stable within a low range (around 1.5 to 1.9), denoting a balanced capital structure. However, starting in early 2023, the ratio began to rise again, climbing to above 2.4 by mid-2025. This increase aligns with the growth in total debt and signals a shift toward higher financial leverage compared to equity.

Overall Analysis

The data reveal an initial period of debt reduction and equity growth, implying a strengthening financial position with lower leverage. After 2022, there is a notable increase in debt levels, while equity growth continues but with more variability. The rising debt to equity ratio from 2023 onward indicates a strategic move toward increased borrowing, which may reflect investment in growth initiatives or changes in capital structure strategy. The company’s financial leverage has increased substantially over the most recent periods, which could impact risk and returns going forward.

Total Debt

Total debt exhibits a fluctuating pattern over the observed periods, initially decreasing from $17.23 billion in March 2020 to approximately $16.2 billion by March 2021. Subsequently, it shows a general upward trend, rising steadily to reach nearly $25.23 billion by December 2023. After a slight dip, total debt increases again markedly beginning in early 2024, peaking at around $39.9 billion by June 2025.

Total Capital

Total capital demonstrates a consistent upward trajectory across the time frame. Starting at about $20.3 billion in March 2020, it grows steadily to approximately $30.1 billion by December 2023. Following this, there is an accelerated increase during 2024 and into mid-2025, with total capital reaching nearly $58.2 billion in June 2025. This reflects substantial capital base expansion over the period.

Debt to Capital Ratio

The debt to capital ratio shows a clear downward trend from 0.85 in March 2020 to a low near 0.60 in December 2022, indicating a reduction in the relative proportion of debt financing during that span. However, from late 2022 onwards, the ratio stabilizes around the low 0.6 range before gradually increasing again from 0.63 in early 2023 up to approximately 0.70 by June 2025. This increase corresponds with the recent acceleration in absolute debt levels, suggesting a shift to higher leverage.

Overall Analysis

The data reflects an initial phase marked by debt reduction and moderate capital growth, leading to improved leverage ratios. Following this, both total debt and capital increase significantly, with debt rising more sharply in the most recent periods, driving an uptick in leverage. The trends suggest a strategic shift involving greater debt utilization to finance capital, possibly to support expansion or investment activities. Continuous monitoring of leverage metrics will be important given the recent increase in debt relative to capital.

The analysis of the quarterly financial data reveals several key trends regarding the company's capital structure and asset growth over the observed periods.

Total Debt

Total debt exhibits significant fluctuations across the quarters. Initially, there is a general decline from approximately 17.2 billion US dollars at the beginning of 2020 to around 16.2 billion by the first quarter of 2021. Subsequently, total debt experiences a moderate increase, reaching values slightly above 18.8 billion by early 2023. From this point onward, the debt escalates sharply, peaking near 39.9 billion by mid-2025. This upward trend indicates a growing reliance on debt financing in the later periods.

Total Assets

Total assets show a consistent and steady upward trajectory throughout the entire timeframe. Starting at approximately 41.1 billion US dollars in the first quarter of 2020, assets increase steadily each quarter with minor plateaus around mid-2022. By mid-2025, assets reach an impressive level of about 100.9 billion US dollars, reflecting substantial growth and expansion of the company's asset base over the period.

Debt to Assets Ratio

The debt to assets ratio initially decreases from 0.42 in the first quarter of 2020 to a low of approximately 0.33 by late 2022, indicating a reduction in leverage and an improvement in the company's asset backing relative to its debt. However, from early 2023, this ratio climbs again, reaching approximately 0.43 by mid-2025. This reversal suggests that debt is growing at a faster pace than assets in these later periods, increasing the company's leverage and potentially its financial risk.

In summary, the company demonstrates strong asset growth over the observed quarters, which initially outpaces the accumulation of debt, leading to a reduction in leverage. Nevertheless, from the start of 2023 onwards, debt accumulation accelerates significantly, outstripping asset growth and resulting in increased leverage. This pattern may reflect strategic financing choices or changing market conditions impacting the company's capital structure.

Total Assets

Total assets show an overall increasing trend over the analyzed periods. Beginning at approximately 41.1 billion US dollars in March 2020, the figure rises steadily to reach roughly 64.0 billion by December 2023. After a slight plateau around early 2024, assets continue their upward trajectory, culminating near 100.9 billion by June 2025. This growth indicates consistent expansion and investment over time, especially pronounced from early 2023 onward.

Total Eli Lilly and Company Shareholders' Equity

Shareholders' equity exhibits a general upward trend, increasing from about 3.1 billion at the start in March 2020 to around 18.3 billion by mid-2025. The equity growth is relatively steady, with minor fluctuations in mid-2021 and late 2023 periods where there is a slight decrease or leveling off. Despite these fluctuations, the overall trajectory confirms strengthening capital reserves and retained earnings.

Financial Leverage

Financial leverage displays a notable downward trend from March 2020 to December 2020, dropping from 13.35 to 8.27, indicating a reduction in leverage and potentially less reliance on debt financing during that phase. Following this period, leverage continues to decline further to as low as 4.65 in December 2022, reflecting a progressive strengthening of the equity base relative to total assets. However, starting in early 2023, financial leverage fluctuates between approximately 4.7 and 5.9, showing moderate variability but maintaining a lower leverage profile compared to early 2020. This pattern suggests prudent balance sheet management with controlled debt levels relative to equity.

Overall Observations

The data suggest a pattern of asset growth accompanied by corresponding increases in equity, leading to a significant reduction in financial leverage in the initial periods. This indicates an emphasis on solidifying the balance sheet by increasing equity and managing debt prudently. The stabilization of leverage ratios in more recent periods may reflect a balanced approach to financing growth while maintaining strong capital and asset bases. The marked increase in total assets in the later quarters points to increased investments or acquisitions, supported by the equity and leverage trends.