Eli Lilly & Co. (NYSE:LLY)

Net fixed asset turnover

The net fixed asset turnover ratio demonstrated an upward trajectory from March 2021 to March 2022, increasing from 2.95 to a peak of 3.22. This suggests enhanced efficiency in utilizing fixed assets during this period. However, starting in June 2022, the ratio showed a declining trend, dropping sharply by the end of the year to 2.81 and continuing downward into 2023 and 2024, stabilizing in the mid-2.6 range. This decline indicates a reduced efficiency in generating sales from fixed assets over the latter periods analyzed.

Total asset turnover

The total asset turnover ratio experienced gradual growth from 0.54 in March 2021 to a high of 0.62 in the first half of 2022, reflecting improved asset utilization at the company level. However, by December 2022, the ratio began to decline, dipping to around 0.52-0.55 range through 2023 and showing minor fluctuations through 2024 and mid-2025. Overall, after peaking in early 2022, total asset turnover has softened, signifying a moderation in overall asset productivity.

Equity turnover

The equity turnover ratio showed notable volatility throughout the periods. Initially, it increased from 3.69 in March 2021 to a peak of 4.15 in June 2021, followed by a marked decline to 2.68 by December 2021. Thereafter, the ratio remained somewhat erratic, with declines continuing into early 2023 (reaching lows near 2.47) before rebounding to over 3.1 during 2023 and early 2024. This variability suggests fluctuations in how effectively shareholders’ equity was utilized to generate revenues, with periods of both declining and improving performance. By mid-2025, the ratio showed a downward trend again toward 2.5, indicating recent reduced equity utilization efficiency.

Summary

Collectively, the data reveal a period of rising operational efficiency in asset utilization through early 2022, followed by a general slowdown or decrease in efficiency across all measured turnover ratios. The fluctuation in equity turnover points to varying capital management results, while fixed asset and total asset turnovers indicate some challenges in sustaining peak utilization levels. The downward trends in recent quarters suggest the company may need to review asset management strategies to improve turnover metrics going forward.

The analysis of the quarterly financial data reveals several noteworthy trends in revenue, property and equipment, net of accumulated depreciation, and net fixed asset turnover over the examined periods.

Revenue

Revenue exhibited fluctuations with a general upward trajectory over the course of the periods. Initially, revenue values ranged between approximately 6.7 billion and 8.0 billion US dollars. Starting in March 2023, there was a marked increase in revenue, peaking significantly in the later periods, reaching beyond 17.6 billion US dollars by September 2025. This indicates a strong growth trend in sales or service income, especially notable from early 2023 onward. Short-term dips occurred intermittently, but the long-term trend points to increasing operational scale or market demand.

Property and Equipment, Net of Accumulated Depreciation

The net value of property and equipment consistently increased each quarter, moving from approximately 8.6 billion US dollars at the beginning of the period to over 22.3 billion US dollars by September 2025. This steady rise suggests ongoing capital investments and expansion in fixed assets. The progression indicates a focus on strengthening the company's physical asset base, likely to support growth or productivity enhancements.

Net Fixed Asset Turnover

The net fixed asset turnover ratio, which measures how efficiently the company generates revenue from its property and equipment, showed an initial slight increase from 2.95 to a peak of 3.22 by March 2022. However, following this peak, the ratio experienced a decline, dropping to around 2.59-2.66 in the most recent periods. This trend indicates that despite the increasing value of fixed assets, revenue growth did not keep pace proportionally, resulting in reduced operational efficiency in terms of asset utilization over time.

In summary, the company demonstrated robust revenue growth and significant capital asset accumulation throughout the periods. Nevertheless, the declining net fixed asset turnover ratio suggests that asset utilization efficiency has weakened somewhat, which could imply the need for improved operational management or the presence of a lag between asset investment and corresponding revenue benefits.

Revenue Trend

Revenue exhibited a general upward trajectory over the assessed periods, starting at approximately 6,805,600 thousand US dollars and reaching a peak near 17,600,800 thousand US dollars by the last period. Despite some fluctuations, notable increases occurred from early 2023 onwards, indicating strong growth momentum in recent quarters.

Total Assets Development

Total assets demonstrated a steady increase throughout the entire timeframe, rising from around 46,838,300 thousand US dollars to over 114,935,400 thousand US dollars. This consistent asset growth reflects expansion in the company’s asset base, with particularly rapid growth observed in the later periods starting from 2022.

Total Asset Turnover Ratio Dynamics

The total asset turnover ratio fluctuated moderately between 0.52 and 0.62, showing no clear long-term trend but instead exhibiting a pattern of periodic ups and downs. Initially, the ratio increased slightly to a peak near 0.62 in mid-2021 and mid-2022, but subsequently declined to values closer to 0.52 by the end of the dataset. This indicates that asset utilization efficiency remained relatively stable with some variances but did not improve proportionally to the growth in assets or revenue.

Overall Insights

The company achieved significant revenue growth alongside considerable expansion of total assets, suggesting successful scaling of operations or investment in asset base. However, the stable to slightly declining total asset turnover ratio implies that revenue growth was generally in line with asset increases, with efficiency of asset use remaining relatively constant rather than improving. This could suggest the company is investing heavily in growth initiatives which are not yet translating into proportional asset productivity enhancements.

The analysis of the quarterly financial data reveals distinct trends in revenue, shareholders' equity, and equity turnover ratios over the observed periods.

Revenue Trends

Revenue exhibits notable fluctuations throughout the timeline. Initially, there is a moderate variation around the 6.8 to 8.0 billion US dollars mark from early 2021 through the end of 2022. Starting in early 2023, revenue grows significantly, peaking towards the end of the observed range in late 2025 with a value exceeding 17.6 billion US dollars. This upward trajectory after 2023 suggests accelerating business growth or improved sales performance in latter periods.

Total Shareholders’ Equity

Shareholders’ equity demonstrates a steady upward trend from approximately 6.9 billion US dollars in early 2021 to over 23.7 billion US dollars by the end of 2025. This increase is almost continuous with minor fluctuations, indicating strong growth in the company's net asset base or retained earnings over time. The steady capital accumulation reflects positively on the company's financial stability and capacity to fund operations or investments internally.

Equity Turnover Ratio

The equity turnover ratio, which measures how efficiently equity is used to generate revenue, shows a declining pattern from a peak of over 4.1 in mid-2021 down to lower values around 2.5 by late 2025. This decreasing trend suggests that despite rising revenue and equity levels, the efficiency with which equity is being converted into revenue is diminishing. There are some short-term recoveries in equity turnover, but the general direction is downward, which may indicate increased equity base growth outpacing revenue growth or less effective asset utilization.

In summary, the financial data portrays strong growth in both revenue and shareholders' equity, indicative of expanding scale and financial robustness. However, the declining equity turnover ratio signals a reduction in capital efficiency, warranting further investigation into the operational aspects or capital management strategies to ensure sustainable return on equity in future periods.