Eli Lilly & Co. (NYSE:LLY)

Debt to Equity Ratio Trends

The debt to equity ratio demonstrates an initial downward trend from 2.94 in 2020 to 1.52 in 2022, indicating a reduction in reliance on debt relative to shareholders' equity during this period. However, this trend reverses in 2023 and 2024, with the ratio increasing to 2.34 and 2.37 respectively, suggesting renewed leverage growth.

Debt to Equity Including Operating Lease Liability

This metric closely mirrors the debt to equity ratio, showing a decrease from 3.06 in 2020 to 1.59 in 2022, followed by an increase to 2.44 in 2023 and 2.45 in 2024. The similarity suggests operating lease liabilities are a consistent component of the overall debt profile.

Debt to Capital

Debt to capital decreases from 0.75 in 2020 to 0.60 in 2022, indicating enhanced capital structure management with a reduction in the proportion of debt financing. Subsequently, it rises to 0.70 in 2023 and remains stable into 2024, consistent with the increased debt to equity ratios observed in those years.

Debt to Capital Including Operating Lease Liability

This ratio aligns closely with the debt to capital metric, declining from 0.75 to 0.61 between 2020 and 2022, then increasing to 0.71 in 2023 and 2024. This reinforces the role of operating leases in the debt structure and highlights a parallel trend in capital reliance on debt.

Debt to Assets

The debt to assets ratio declines slightly from 0.36 in 2020 to 0.33 in 2022, suggesting a moderate reduction in asset financing through debt. However, it rises to 0.39 in 2023 and further to 0.43 in 2024, indicating increased leverage relative to total assets in recent years.

Debt to Assets Including Operating Lease Liability

This trend is consistent with the debt to assets ratio, decreasing from 0.37 in 2020 to 0.34 in 2022, then rising to 0.41 and 0.44 in 2023 and 2024 respectively. This similarity underscores the influence of operating lease liabilities on the total debt burden.

Financial Leverage

Financial leverage exhibits a pronounced decrease from 8.27 in 2020 to 4.65 in 2022, implying significant de-risking in capital structure or an increase in equity base. However, it climbs back to 5.94 in 2023 before slightly declining to 5.55 in 2024, suggesting some return to higher leverage levels but not reaching early period highs.

Interest Coverage

Interest coverage remains strong through the period, starting at 21.11 in 2020 and maintaining a range in the twenties and teens, reaching a low of 14.49 in 2023. This decline indicates reduced ability to cover interest expenses during that year, followed by partial recovery to 17.24 in 2024, reflecting somewhat improved earnings relative to interest obligations.

Fixed Charge Coverage

Similar to interest coverage, fixed charge coverage declines from 15.06 in 2020 to 10.98 in 2023, showing a weakened capacity to meet fixed financial charges amid increased liabilities or potentially lower operating income. A rebound to 13.81 in 2024 indicates an improvement but still below early period levels.

The annual financial data reveals notable movements in the company's capital structure over the analyzed periods. A clear trend can be identified in both total debt and shareholders' equity, which have experienced fluctuations and significant growth, respectively.

Total Debt

Total debt showed a slight increase from 16,595,300 thousand US dollars in 2020 to 16,884,700 thousand US dollars in 2021, then decreased moderately to 16,238,600 thousand US dollars in 2022. However, a substantial rise occurred in 2023, with total debt increasing sharply to 25,225,300 thousand US dollars, continuing to reach 33,644,200 thousand US dollars by the end of 2024. This indicates a marked increase in leverage beginning in 2023.

Total Shareholders’ Equity

Shareholders' equity has shown consistent and strong growth over the five-year period. It increased from 5,641,600 thousand US dollars in 2020 to 8,979,200 thousand US dollars in 2021, followed by further rises to 10,649,800 thousand US dollars in 2022 and 10,771,900 thousand US dollars in 2023. By 2024, equity reached 14,192,100 thousand US dollars, indicating a healthy increase in the company's net assets.

Debt to Equity Ratio

The debt to equity ratio trended downward initially, dropping from 2.94 in 2020 to 1.88 in 2021 and further to 1.52 in 2022, reflecting deleveraging or more rapid growth in equity relative to debt. However, this trend reversed in 2023 when the ratio increased again to 2.34, and slightly to 2.37 in 2024, signaling increased leverage consistent with the substantial rise in debt during these years.

Overall, the data suggests that the company operated with a relatively high leverage ratio initially, improved its equity position while reducing leverage up to 2022, but then significantly increased debt levels from 2023 onwards, causing leverage to rise again despite growing equity. This pattern highlights strategic shifts potentially aimed at financing expansion or other capital-intensive activities starting in 2023.

Total Debt (including operating lease liability)

The total debt experienced a moderate decline from 17,259,000 thousand US dollars in 2020 to 16,966,800 thousand US dollars in 2022. However, this was followed by a significant increase in debt levels over the next two years, reaching 26,330,100 thousand US dollars in 2023 and further rising to 34,790,800 thousand US dollars in 2024. This pattern suggests an initially conservative approach to debt management, transitioning into a period of substantial borrowing.

Total Shareholders’ Equity

Shareholders’ equity demonstrated steady growth across the five-year period. Starting at 5,641,600 thousand US dollars in 2020, it rose markedly to 8,979,200 thousand US dollars in 2021 and continued to increase annually, though at a slower pace, reaching 14,192,100 thousand US dollars by 2024. This upward trend indicates an accumulation of retained earnings or new equity infusion contributing to stronger capitalization.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio showed a declining trend from 3.06 in 2020 to 1.59 in 2022, reflecting a reduction in leverage relative to equity. However, this trend reversed in subsequent years, with the ratio increasing to 2.44 in 2023 and stabilizing slightly at 2.45 in 2024. The initial decline in leverage ratio aligns with the reduction in debt combined with rising equity, while the later increase corresponds with the sharp debt accumulation in 2023 and 2024 outpacing the growth of equity.

Overall Insights

The data reveals that the company initially strengthened its financial position by decreasing relative debt exposure and increasing equity. This phase was followed by a strategic shift towards increased leverage, indicated by the sharp rise in total debt and a higher debt to equity ratio. Despite this increased indebtedness, equity also continued to grow, suggesting balanced growth in capital structure but with greater reliance on debt financing in the latter years.

The financial data indicates notable developments in the company's capital structure over the five-year period analyzed.

Total Debt

The total debt demonstrates a fluctuating but generally increasing trend. Initially, the debt rose slightly from 16,595,300 thousand USD in 2020 to 16,884,700 thousand USD in 2021, followed by a decrease to 16,238,600 thousand USD in 2022. Subsequently, there is a significant increase in debt levels reaching 25,225,300 thousand USD in 2023 and further escalating to 33,644,200 thousand USD in 2024. This sharp rise in the last two years suggests increased leverage or possibly financing for expansion or other strategic initiatives.

Total Capital

Total capital exhibits a steady upward trajectory throughout the period. From 22,236,900 thousand USD in 2020, it grows to 25,863,900 thousand USD in 2021, then to 26,888,400 thousand USD in 2022. The growth accelerates in 2023 and 2024, reaching 35,997,200 thousand USD and 47,836,300 thousand USD respectively. The rising total capital reflects an expanding asset base or an increase in financing through equity, debt, or retained earnings.

Debt to Capital Ratio

The debt-to-capital ratio shows some variability over time, indicating shifts in financial leverage relative to total capital. The ratio decreases from 0.75 in 2020 to 0.65 in 2021 and further to 0.60 in 2022, suggesting a deleveraging phase or stronger equity growth relative to debt. However, in 2023 and 2024, the ratio rises back to 0.70, reflecting the increase in debt outpacing capital growth during these years. This return to higher leverage levels indicates a strategic choice to utilize more debt financing or possibly reflects changing market or operational conditions.

Overall, the company shows a trend of increasing total capital and heightened debt levels in recent years, with fluctuating debt-to-capital ratios that point to changing leverage strategies. The last two years, in particular, suggest a shift towards greater reliance on debt, which could impact risk profiles and financial flexibility going forward.

The financial data reveals notable fluctuations in the company's leverage and capital structure over the five-year period under review.

Total Debt (including operating lease liability)

The total debt experienced a gradual decline from 17,259,000 thousand US dollars in 2020 to 16,966,800 thousand US dollars in 2022. However, a substantial increase occurred thereafter, with debt reaching 26,330,100 thousand US dollars in 2023 and further rising to 34,790,800 thousand US dollars by the end of 2024. This indicates a strategic increase in leverage in the latter part of the period.

Total Capital (including operating lease liability)

Total capital showed a consistent upward trend throughout the period. Starting at 22,900,600 thousand US dollars in 2020, it climbed steadily each year, reaching 26,549,600 thousand US dollars in 2021 and 27,616,600 thousand US dollars in 2022. There was a marked jump to 37,102,000 thousand US dollars in 2023, followed by another significant increase to 48,982,900 thousand US dollars in 2024. This growth reflects an expansion in the capital base, likely through increased equity, retained earnings, or a combination thereof.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio declined from a high level of 0.75 in 2020 to a low of 0.61 in 2022, suggesting improved capital structure favoring equity or reduced reliance on debt during this interval. However, this trend reversed in the subsequent years with the ratio increasing to 0.71 in 2023 and remaining stable at 0.71 in 2024, indicating a relative increase in leverage, consistent with the growth in total debt observed in the same period.

The financial data reveals a progressive increase in total debt and total assets over the five-year period from the end of 2020 through 2024, accompanied by fluctuations in the debt-to-assets ratio.

Total Debt

Total debt showed moderate growth from 16,595,300 thousand US dollars at the end of 2020 to approximately 16,238,600 thousand US dollars by the end of 2022, reflecting a slight decrease in 2022 compared to 2021. However, there is a marked increase in total debt in 2023, reaching 25,225,300 thousand US dollars, followed by a further substantial rise to 33,644,200 thousand US dollars by the end of 2024. This indicates a significant expansion in leverage in the last two years of the period assessed.

Total Assets

Total assets expanded steadily across all years, starting at 46,633,100 thousand US dollars at the end of 2020 and reaching 49,489,800 thousand US dollars by the end of 2022. The increase became more pronounced thereafter, with total assets rising sharply to 64,006,300 thousand US dollars in 2023 and further to 78,714,900 thousand US dollars by the end of 2024. This reflects considerable growth in the company’s asset base, particularly in the latter years.

Debt to Assets Ratio

The debt-to-assets ratio declined gradually from 0.36 in 2020 to 0.33 in 2022, indicating a decreasing relative debt position compared to total assets during this period. However, the ratio reversed direction starting in 2023, increasing to 0.39 and further to 0.43 in 2024. This shift suggests that debt grew at a faster pace than assets in the most recent years, implying increased financial leverage and potentially greater financial risk.

The financial data reveals significant movements in the company's leverage and asset base over the observed five-year period. Several notable trends and insights emerge from the analysis of total debt, total assets, and the debt-to-assets ratio.

Total Debt (including operating lease liability)

There is a marked escalation in total debt levels from 2020 to 2024. Initially, the total debt recorded a slight increase from 17.26 billion USD in 2020 to approximately 17.57 billion USD in 2021, followed by a moderate decline to roughly 16.97 billion USD in 2022. However, from 2022 onwards, the debt escalated sharply to 26.33 billion USD in 2023, and further surged to approximately 34.79 billion USD by the end of 2024. This upward trajectory indicates significant borrowing or increased lease obligations during the latter part of the period.

Total Assets

Total assets have consistently expanded each year, reflecting growth in the company’s asset base. Starting from 46.63 billion USD in 2020, assets experienced steady increases annually, reaching 48.81 billion USD in 2021 and 49.49 billion USD in 2022. The growth accelerated notably afterwards, culminating in 64.01 billion USD in 2023 and further rising to 78.71 billion USD in 2024. This expansion suggests ongoing investment, acquisition, or capital expenditure activities leading to asset accumulation.

Debt to Assets Ratio (including operating lease liability)

The ratio of debt to assets shows a declining trend initially, decreasing from 0.37 in 2020 to 0.36 in 2021, and further down to 0.34 in 2022. This suggests a proportionally lower debt burden relative to assets during the early period. However, from 2022 onward, the ratio reverses course, rising sharply to 0.41 in 2023 and then to 0.44 in 2024. The increase indicates that debt grew at a faster rate than assets in these years, signaling a higher leverage position and potentially greater financial risk.

In summary, the data portrays a company that has invested significantly in asset growth while simultaneously increasing its debt exposure, especially in the most recent two years. The rising debt-to-assets ratio in the last two years warrants attention, as the higher leverage level may impact financial stability and cost of capital. The company’s capacity to manage this increased debt load alongside continued asset growth will be a critical factor in its financial health going forward.

The analysis of the provided data reveals several notable trends and patterns over the five-year period ending in 2024.

Total Assets

Total assets increased steadily from 46.63 billion USD at the end of 2020 to 78.71 billion USD by the end of 2024. This indicates significant growth in the asset base over the period, with a particularly sharp increase between 2022 and 2023. The nearly 69% increase from 2020 to 2024 suggests expansion, potentially reflecting investments, acquisitions, or organic growth in the company's asset portfolio.

Total Shareholders’ Equity

Shareholders’ equity showed robust growth from 5.64 billion USD in 2020 to 14.19 billion USD in 2024. The increment was fairly consistent, with a remarkable increase between 2020 and 2021, suggesting the company improved retained earnings or issued new equity. From 2021 onwards, equity continued to rise steadily, indicating strengthened financial position and possibly increased profitability or capital inflows.

Financial Leverage

The financial leverage ratio decreased significantly from 8.27 in 2020 to 4.65 in 2022, implying a reduction in the use of debt relative to equity during this period. However, after 2022, this ratio slightly increased again to 5.94 in 2023 before slightly decreasing to 5.55 in 2024. The initial decline suggests improved capitalization and a stronger equity base, while the subsequent moderate rise may indicate additional borrowing or changes in capital structure to support asset growth.

The financial data reveals several important trends across the analyzed time periods for the given company.

Earnings before Interest and Tax (EBIT)

EBIT showed a decline between 2020 and 2021, dropping from 7,589,500 thousand US dollars to 6,495,300 thousand US dollars. This was followed by a moderate recovery in 2022 and a slight decrease in 2023, maintaining values close to 7 million US dollars. A significant increase is observed in 2024, more than doubling to 13,461,000 thousand US dollars. This marked growth indicates a potentially improved operational performance or favorable market conditions in the latest year.

Interest Expense

Interest expense decreased gradually from 359,600 thousand US dollars in 2020 to 331,600 thousand US dollars in 2022. However, it increased notably in 2023 to 485,900 thousand US dollars and further rose to 780,600 thousand US dollars in 2024. This upward trend in interest expense during the last two years suggests higher borrowing costs or increased debt levels.

Interest Coverage Ratio

The interest coverage ratio declined over time, beginning at 21.11 in 2020 and decreasing to 14.49 in 2023. There was a recovery to 17.24 in 2024, yet this remains below the earlier years. Despite fluctuations in EBIT and rising interest expenses, the ratio staying above 10 indicates the company generally maintained a strong ability to service its interest obligations without financial distress.

In summary, the company experienced varying operational performance with a substantial EBIT improvement in the latest year. However, interest expenses increased significantly toward the end of the period, slightly pressuring the interest coverage ratio. Overall, the company's earnings appear robust relative to its cost of debt, though the trend merits monitoring given fluctuating costs and coverage levels.

The financial data reveals evolving trends in earnings, fixed charges, and coverage over a five-year period.

Earnings Before Fixed Charges and Tax

The earnings experienced a decline from 7.74 billion USD in 2020 to approximately 6.65 billion USD in 2021. This was followed by a moderate recovery in 2022 to roughly 7.29 billion USD and a slight decrease in 2023 to 7.21 billion USD. Notably, there was a substantial increase in 2024, reaching approximately 13.67 billion USD, indicating a significant boost in operational profitability or other earnings excluding fixed charges and tax.

Fixed Charges

Fixed charges demonstrated a general downward trend from 514.2 million USD in 2020 to 480.4 million USD in 2022. However, a marked increase occurred in the subsequent years, climbing to 657.1 million USD in 2023 and further to 990.2 million USD in 2024. This suggests rising obligations related to interest and similar expenses, which could impact net income if unchecked.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio started high at 15.06 in 2020, decreased to 13.33 in 2021, then climbed back to 15.17 in 2022. In 2023, the ratio fell notably to 10.98 before recovering somewhat to 13.81 in 2024. Despite fluctuations, the ratio remains above 10 across all years, reflecting a generally strong ability to cover fixed charges from earnings. The dip in 2023 suggests relatively constrained coverage during that year, possibly due to increased fixed charges coupled with slightly diminished earnings.

Overall, the data indicates a relatively stable earnings pattern with a significant upswing in 2024, accompanied by increasing fixed charges in later years. Although the fixed charge coverage ratio declined notably in 2023, it maintained a healthy level above 10 throughout the period, signifying sound financial resilience against fixed charge obligations.