Stock Analysis on Net

Eli Lilly & Co. (NYSE:LLY)

Analysis of Short-term (Operating) Activity Ratios 

Microsoft Excel

Short-term Activity Ratios (Summary)

Eli Lilly & Co., short-term (operating) activity ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Turnover Ratios
Inventory turnover 1.11 1.23 1.54 1.88 1.38
Receivables turnover 4.09 3.75 4.14 4.24 4.18
Payables turnover 2.61 2.73 3.43 4.38 3.41
Working capital turnover 10.32 31.84 8.33 4.93
Average No. Days
Average inventory processing period 329 298 237 194 265
Add: Average receivable collection period 89 97 88 86 87
Operating cycle 418 395 325 280 352
Less: Average payables payment period 140 134 106 83 107
Cash conversion cycle 278 261 219 197 245

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 financial data exhibits several notable trends over the five-year period ending in 2024, reflecting changes in operational efficiency and liquidity management.

Inventory Turnover
The inventory turnover ratio decreased from a peak of 1.88 in 2021 to 1.11 in 2024, indicating a slower movement of inventory. This trend is corroborated by the increasing average inventory processing period, which extended from 194 days in 2021 to 329 days in 2024, suggesting that the company is holding inventory for a longer duration before sale.
Receivables Turnover
The receivables turnover ratio remained relatively stable with minor fluctuations, moving between 4.09 and 4.24 over the years. Correspondingly, the average receivable collection period hovered around 86-97 days, suggesting consistent collection efforts without significant deterioration or improvement.
Payables Turnover
The payables turnover ratio showed a declining trend from 4.38 in 2021 to 2.61 in 2024, indicating the company is taking longer to pay its suppliers. This is reflected in the increase in the average payables payment period from 83 days in 2021 to 140 days in 2024.
Working Capital Turnover
The working capital turnover ratio displayed considerable volatility, with a remarkable spike to 31.84 in 2022 but missing data in 2023. By 2024, it settled at 10.32, remaining significantly higher than the 2020 and 2021 levels. This suggests fluctuating efficiency in utilizing working capital to generate sales.
Operating Cycle
The operating cycle, representing the total duration from inventory acquisition to cash collection, has lengthened steadily from 280 days in 2021 to 418 days in 2024. The increase reflects longer inventory holding and receivables collection periods.
Cash Conversion Cycle
The cash conversion cycle, measuring the duration between cash outflow and inflow, increased from 197 days in 2021 to 278 days in 2024. This increase indicates that cash is tied up in the operating cycle for a longer time before being converted back into cash, which could pressure liquidity.

Turnover Ratios


Average No. Days


Inventory Turnover

Eli Lilly & Co., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in thousands)
Cost of sales 8,418,300 7,082,200 6,629,800 7,312,800 5,483,300
Inventories 7,589,200 5,772,800 4,309,700 3,886,000 3,980,300
Short-term Activity Ratio
Inventory turnover1 1.11 1.23 1.54 1.88 1.38
Benchmarks
Inventory Turnover, Competitors2
AbbVie Inc. 4.04 4.98 4.87 5.58 4.65
Amgen Inc. 1.84 0.89 1.30 1.58 1.58
Bristol-Myers Squibb Co. 5.46 4.02 4.33 4.74 5.68
Danaher Corp. 4.15 3.80 4.03 4.16 4.28
Gilead Sciences Inc. 3.66 3.64 3.75 4.08 2.72
Johnson & Johnson 2.21 2.37 2.49 2.87 3.04
Merck & Co. Inc. 2.49 2.54 2.95 2.29 2.45
Pfizer Inc. 1.65 2.45 3.82 3.40 1.08
Regeneron Pharmaceuticals Inc. 0.64 0.70 0.65 1.25 0.58
Thermo Fisher Scientific Inc. 5.06 5.06 4.60 3.88 4.02
Vertex Pharmaceuticals Inc. 1.27 1.71 2.35 2.56 2.62
Inventory Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences 2.46 2.55 3.06 3.11 2.63
Inventory Turnover, Industry
Health Care 9.50 9.18 9.22 9.17 8.17

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
Inventory turnover = Cost of sales ÷ Inventories
= 8,418,300 ÷ 7,589,200 = 1.11

2 Click competitor name to see calculations.


The analysis of the financial data reveals several key trends related to cost of sales, inventories, and inventory turnover over the five-year period ending December 31, 2024.

Cost of Sales
There is a notable increase in cost of sales from 2020 to 2024. The figure rose from approximately US$5.48 billion in 2020 to about US$8.42 billion in 2024. Despite a peak in 2021 at around US$7.31 billion, a slight decrease occurred in 2022 to roughly US$6.63 billion before rising again in 2023 and reaching the highest point in 2024. This overall upward trend indicates increasing production or procurement costs, possibly due to expansion, inflationary pressures, or changes in product mix.
Inventories
Inventories show a steady increase throughout the five years. Starting at approximately US$3.98 billion in 2020, inventories rose gradually each year, reaching roughly US$7.59 billion by 2024. The most significant annual increase occurred between 2022 and 2023, where inventories jumped from about US$4.31 billion to US$5.77 billion, suggesting either stockpiling strategies, anticipation of higher demand, or slower inventory turnover.
Inventory Turnover Ratio
Inventory turnover declined over the period analyzed, falling from 1.38 in 2020 to 1.11 in 2024. This decreasing ratio indicates that the company is selling through its inventory less frequently each year, pointing to slower movement of goods relative to inventory levels. The decline is consistent with the significant rise in inventory balances, indicating potential excess stock or slower sales growth compared to inventory accumulation.

In summary, the company experienced increasing costs of sales alongside a notable build-up in inventories, accompanied by a decreasing frequency of inventory turnover. These patterns collectively could reflect changes in operational dynamics, supply chain strategies, or market demand conditions, which may warrant further investigation to optimize inventory management and cost control.


Receivables Turnover

Eli Lilly & Co., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in thousands)
Revenue 45,042,700 34,124,100 28,541,400 28,318,400 24,539,800
Accounts receivable, net of allowances 11,005,700 9,090,500 6,896,000 6,672,800 5,875,300
Short-term Activity Ratio
Receivables turnover1 4.09 3.75 4.14 4.24 4.18
Benchmarks
Receivables Turnover, Competitors2
AbbVie Inc. 5.16 4.87 5.16 5.63 5.19
Amgen Inc. 4.72 3.70 4.46 4.96 5.36
Bristol-Myers Squibb Co. 5.19 4.93 5.48 5.65 5.72
Danaher Corp. 6.75 6.09 6.40 6.36 5.51
Gilead Sciences Inc. 6.47 5.78 5.65 6.01 4.98
Johnson & Johnson 5.98 5.73 5.88 6.14 6.08
Merck & Co. Inc. 6.24 5.81 6.27 5.28 6.11
Pfizer Inc. 5.55 5.33 9.24 7.16 5.38
Regeneron Pharmaceuticals Inc. 2.29 2.31 2.28 2.66 2.07
Thermo Fisher Scientific Inc. 5.23 5.21 5.53 4.92 5.61
Vertex Pharmaceuticals Inc. 6.85 6.31 6.19 6.66 7.01
Receivables Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences 5.26 4.96 5.76 5.54 5.34
Receivables Turnover, Industry
Health Care 8.42 8.15 8.84 8.65 8.64

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
Receivables turnover = Revenue ÷ Accounts receivable, net of allowances
= 45,042,700 ÷ 11,005,700 = 4.09

2 Click competitor name to see calculations.


The financial data reveals several notable trends over the five-year period from 2020 to 2024.

Revenue
Revenue exhibits a consistent upward trajectory with a particularly strong increase in 2023 and 2024. Starting at approximately $24.5 billion in 2020, revenue grows steadily in the first two years, then accelerates to $34.1 billion in 2023 and reaches $45.0 billion by the end of 2024. This indicates robust sales growth and possibly expanding market demand or successful product launches during these years.
Accounts Receivable, Net of Allowances
Accounts receivable follow a similar rising pattern, increasing from about $5.9 billion in 2020 to $11.0 billion in 2024. The growth in accounts receivable is somewhat proportional to revenue growth, suggesting that the company is extending more credit to its customers or experiencing longer collection periods as the business scales up.
Receivables Turnover Ratio
The receivables turnover ratio, which measures the efficiency of collecting receivables, remains relatively stable but shows some fluctuations. It starts at 4.18 in 2020, marginally improves to 4.24 in 2021, then dips to 4.14 in 2022 and further decreases to 3.75 in 2023, before rebounding to 4.09 in 2024. The drop in 2023 may indicate a slower collection process or more lenient credit terms, which then slightly recovers in the following year.

In summary, the company demonstrates strong revenue growth supported by increasing accounts receivable balances. While the receivables turnover ratio fluctuates, the general level remains fairly stable, suggesting that the company manages to maintain reasonable collection efficiency despite the significant expansion in sales and receivables.


Payables Turnover

Eli Lilly & Co., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in thousands)
Cost of sales 8,418,300 7,082,200 6,629,800 7,312,800 5,483,300
Accounts payable 3,228,600 2,598,800 1,930,600 1,670,600 1,606,700
Short-term Activity Ratio
Payables turnover1 2.61 2.73 3.43 4.38 3.41
Benchmarks
Payables Turnover, Competitors2
AbbVie Inc. 5.74 5.54 5.94 6.05 6.76
Amgen Inc. 6.74 5.32 4.08 4.72 4.33
Bristol-Myers Squibb Co. 3.88 3.28 3.33 3.37 4.34
Danaher Corp. 5.52 5.58 5.45 4.48 4.79
Gilead Sciences Inc. 7.50 11.81 6.25 9.36 5.42
Johnson & Johnson 2.66 2.76 2.66 2.70 2.99
Merck & Co. Inc. 3.72 4.11 4.08 2.96 3.37
Pfizer Inc. 3.17 3.72 5.04 5.53 2.02
Regeneron Pharmaceuticals Inc. 2.50 2.99 2.65 4.32 2.36
Thermo Fisher Scientific Inc. 8.18 8.97 7.67 6.83 7.45
Vertex Pharmaceuticals Inc. 3.71 3.46 3.55 4.64 4.75
Payables Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences 4.08 4.25 4.28 4.23 3.86
Payables Turnover, Industry
Health Care 8.12 7.96 7.50 7.61 7.48

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
Payables turnover = Cost of sales ÷ Accounts payable
= 8,418,300 ÷ 3,228,600 = 2.61

2 Click competitor name to see calculations.


The financial data displays notable trends in cost of sales, accounts payable, and payables turnover over the five-year period from 2020 to 2024.

Cost of Sales
The cost of sales exhibits a generally increasing trajectory across the given years. Starting at approximately 5.48 billion US dollars in 2020, it rises sharply in 2021 to about 7.31 billion, followed by a decline to roughly 6.63 billion in 2022. Subsequently, it increases again to around 7.08 billion in 2023 and further to about 8.42 billion in 2024. This pattern suggests variability but an overall trend of growth in the costs associated with production or procurement.
Accounts Payable
Accounts payable shows a consistent upward trend over the period examined. Beginning at approximately 1.61 billion US dollars in 2020, it incrementally increases each year to approximately 1.67 billion in 2021, 1.93 billion in 2022, 2.60 billion in 2023, and reaching about 3.23 billion by 2024. This steady increase indicates that the company is delaying payments to suppliers or increasing its purchase on credit.
Payables Turnover Ratio
The payables turnover ratio demonstrates a declining trend, indicating slower turnover of accounts payable. The ratio rises from 3.41 in 2020 to a peak of 4.38 in 2021, suggesting faster payment to suppliers in that year. However, from 2022 onward, the ratio decreases progressively to 3.43, then 2.73, and finally 2.61 in 2024. This decline correlates with the rising accounts payable balance and suggests the company is taking more time to pay its suppliers as time progresses.

In summary, the data reveals an increasing cost of sales and a corresponding rise in accounts payable, coupled with a declining payables turnover ratio after 2021. This combination implies that the company’s operational expenses are growing and that it is extending the payment period to its suppliers, which could be a strategic move to optimize cash flow management or a response to changing supplier terms or market conditions.


Working Capital Turnover

Eli Lilly & Co., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
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
Less: Current liabilities 28,376,600 27,293,200 17,138,200 15,052,700 12,481,600
Working capital 4,363,100 (1,566,200) 896,300 3,399,700 4,980,500
 
Revenue 45,042,700 34,124,100 28,541,400 28,318,400 24,539,800
Short-term Activity Ratio
Working capital turnover1 10.32 31.84 8.33 4.93
Benchmarks
Working Capital Turnover, Competitors2
AbbVie Inc.
Amgen Inc. 5.40 2.25 3.82 3.37 2.55
Bristol-Myers Squibb Co. 7.79 4.60 8.30 3.95 3.72
Danaher Corp. 8.85 4.22 4.20 8.40 3.48
Gilead Sciences Inc. 3.99 5.61 8.42 8.54 5.30
Johnson & Johnson 15.94 11.81 5.95 9.44
Merck & Co. Inc. 6.19 9.29 5.16 7.62 109.83
Pfizer Inc. 8.64 11.09 4.83 4.67
Regeneron Pharmaceuticals Inc. 0.97 0.82 0.96 1.59 1.20
Thermo Fisher Scientific Inc. 4.87 4.05 5.46 5.87 2.76
Vertex Pharmaceuticals Inc. 1.83 0.93 0.85 1.02 0.99
Working Capital Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences 7.86 6.68 7.25 5.87 5.34
Working Capital Turnover, Industry
Health Care 19.80 16.59 15.34 11.93 11.78

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
Working capital turnover = Revenue ÷ Working capital
= 45,042,700 ÷ 4,363,100 = 10.32

2 Click competitor name to see calculations.


Working Capital
The working capital exhibits significant volatility over the five-year period. Initially, there is a noticeable decline from 4,980,500 thousand US dollars in 2020 to 896,300 thousand US dollars in 2022. This decline continues into 2023, where working capital turns negative, reaching -1,566,200 thousand US dollars. However, in 2024, the working capital rebounded sharply to 4,363,100 thousand US dollars, indicating a strong recovery after the previous downturn.
Revenue
Revenue displays a consistent upward trend throughout the period analyzed. From 24,539,800 thousand US dollars in 2020, revenue increases steadily each year, reaching 45,042,700 thousand US dollars in 2024. This represents substantial growth, especially noted between 2023 and 2024, where revenue jumped by over 9 billion US dollars. The trend reflects a positive expansion in the company's sales or income-generating activities.
Working Capital Turnover
The working capital turnover ratio shows variability and some data gaps, with the ratio increasing from 4.93 in 2020 to a peak of 31.84 in 2022, indicating that the company was generating significantly more revenue per unit of working capital at that time. However, no value is available for 2023, and the ratio declines to 10.32 in 2024. This suggests a decrease in efficiency in utilizing working capital compared to the peak in 2022 but remains higher than the beginning of the analyzed period.
Overall Insights
The data highlights a company experiencing fluctuations in working capital management alongside steady revenue growth. The negative working capital in 2023 may signal liquidity challenges or changes in operational financing, but the recovery in 2024 suggests corrective measures or improved cash flow management. The peak in working capital turnover in 2022 indicates efficient use of working capital that was not sustained in subsequent years. The strong and continuous increase in revenue underscores robust business performance and market demand, outweighing the working capital volatility observed.

Average Inventory Processing Period

Eli Lilly & Co., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Inventory turnover 1.11 1.23 1.54 1.88 1.38
Short-term Activity Ratio (no. days)
Average inventory processing period1 329 298 237 194 265
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
AbbVie Inc. 90 73 75 65 79
Amgen Inc. 199 411 281 231 231
Bristol-Myers Squibb Co. 67 91 84 77 64
Danaher Corp. 88 96 91 88 85
Gilead Sciences Inc. 100 100 97 89 134
Johnson & Johnson 165 154 147 127 120
Merck & Co. Inc. 147 144 124 159 149
Pfizer Inc. 222 149 95 107 338
Regeneron Pharmaceuticals Inc. 572 519 562 292 625
Thermo Fisher Scientific Inc. 72 72 79 94 91
Vertex Pharmaceuticals Inc. 287 214 156 143 139
Average Inventory Processing Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences 149 143 119 117 139
Average Inventory Processing Period, Industry
Health Care 38 40 40 40 45

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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 1.11 = 329

2 Click competitor name to see calculations.


The financial data indicates notable trends in inventory management over the five-year period.

Inventory Turnover
The inventory turnover ratio increased from 1.38 in 2020 to a peak of 1.88 in 2021, suggesting improved efficiency in selling inventory during that year. However, subsequent years show a consistent decline to 1.54 in 2022, 1.23 in 2023, and further down to 1.11 in 2024. This declining trend reflects a gradual slowing in the rate at which inventory is sold or used, potentially indicating excess stock or slower sales velocity over recent years.
Average Inventory Processing Period
The average inventory processing period, measured in days, shows an inverse relationship to inventory turnover. Starting at 265 days in 2020, the period decreases sharply to 194 days in 2021, complementing the increased turnover that year. However, from 2022 onward, the processing period increases to 237 days, then escalates significantly to 298 days in 2023 and 329 days in 2024. This suggests that inventory is remaining on hand for longer durations, indicating potential inefficiencies in inventory management or changes in demand and supply chain dynamics.

Overall, the data reveals an initial improvement in inventory efficiency in 2021, followed by a reversal that points to increasing inventory holding times and reduced turnover rates. This trend could impact working capital and operational efficiency, warranting further investigation into causes such as changes in sales patterns, production scheduling, or supply chain constraints.


Average Receivable Collection Period

Eli Lilly & Co., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Receivables turnover 4.09 3.75 4.14 4.24 4.18
Short-term Activity Ratio (no. days)
Average receivable collection period1 89 97 88 86 87
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
AbbVie Inc. 71 75 71 65 70
Amgen Inc. 77 99 82 74 68
Bristol-Myers Squibb Co. 70 74 67 65 64
Danaher Corp. 54 60 57 57 66
Gilead Sciences Inc. 56 63 65 61 73
Johnson & Johnson 61 64 62 59 60
Merck & Co. Inc. 58 63 58 69 60
Pfizer Inc. 66 69 40 51 68
Regeneron Pharmaceuticals Inc. 160 158 160 137 177
Thermo Fisher Scientific Inc. 70 70 66 74 65
Vertex Pharmaceuticals Inc. 53 58 59 55 52
Average Receivable Collection Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences 69 74 63 66 68
Average Receivable Collection Period, Industry
Health Care 43 45 41 42 42

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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 4.09 = 89

2 Click competitor name to see calculations.


Receivables Turnover
The receivables turnover ratio demonstrates a slight fluctuation over the observed period. Starting at 4.18 in 2020, it showed a modest increase to 4.24 in 2021, followed by a decline to 4.14 in 2022. A more pronounced decrease occurred in 2023, where the ratio dropped to 3.75, indicating a slower collection of receivables. In 2024, there was a recovery to 4.09, approaching levels seen earlier in the period but still below the 2021 peak.
Average Receivable Collection Period
The average collection period mirrors the trends observed in receivables turnover. It remained relatively stable between 86 and 88 days from 2020 through 2022. However, in 2023, there was a noticeable increase to 97 days, signifying a lengthening in the time taken to collect receivables. This duration decreased to 89 days in 2024, indicating an improvement in receivables management though still higher than the initial years.
Overall Analysis
The trends suggest that the company experienced some challenges in efficiently collecting receivables during 2023, as reflected by the reduced turnover ratio and increased collection period. The partial recovery in 2024 indicates efforts to improve cash flow management, though the efficiency had not fully returned to the earlier, more favorable levels. Monitoring these metrics is important as prolonged collection periods may affect liquidity and working capital.

Operating Cycle

Eli Lilly & Co., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Average inventory processing period 329 298 237 194 265
Average receivable collection period 89 97 88 86 87
Short-term Activity Ratio
Operating cycle1 418 395 325 280 352
Benchmarks
Operating Cycle, Competitors2
AbbVie Inc. 161 148 146 130 149
Amgen Inc. 276 510 363 305 299
Bristol-Myers Squibb Co. 137 165 151 142 128
Danaher Corp. 142 156 148 145 151
Gilead Sciences Inc. 156 163 162 150 207
Johnson & Johnson 226 218 209 186 180
Merck & Co. Inc. 205 207 182 228 209
Pfizer Inc. 288 218 135 158 406
Regeneron Pharmaceuticals Inc. 732 677 722 429 802
Thermo Fisher Scientific Inc. 142 142 145 168 156
Vertex Pharmaceuticals Inc. 340 272 215 198 191
Operating Cycle, Sector
Pharmaceuticals, Biotechnology & Life Sciences 218 217 182 183 207
Operating Cycle, Industry
Health Care 81 85 81 82 87

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
Operating cycle = Average inventory processing period + Average receivable collection period
= 329 + 89 = 418

2 Click competitor name to see calculations.


The financial data reveals notable fluctuations in key operational efficiency metrics over the five-year period. The average inventory processing period exhibits a general upward trend after an initial decrease, indicating changes in inventory management speed. Specifically, the period dropped significantly from 265 days in 2020 to 194 days in 2021, followed by a steady increase reaching 329 days by 2024. This prolonged processing period in later years suggests potential challenges in inventory turnover or shifts in inventory strategy.

The average receivable collection period remains relatively stable with minor variations. It starts at 87 days in 2020, slightly decreases to 86 days in 2021, moderately rises to 88 days in 2022, peaks at 97 days in 2023, and then decreases again to 89 days in 2024. This fluctuation indicates consistent collections with a temporary delay in 2023, which could point to timing issues in receivables or changes in credit policies.

The operating cycle, combining both inventory processing and receivable collection periods, follows an overall increasing trajectory from 352 days in 2020 to 418 days in 2024. After a decline to 280 days in 2021, it consistently rises through the subsequent years, reaching a peak in 2024. This lengthening operating cycle suggests a gradual extension in the time required to turn resources into cash, potentially impacting liquidity and working capital efficiency.

Average Inventory Processing Period
Decreased sharply in 2021, then increased steadily through 2024, reflecting slower inventory turnover in recent years.
Average Receivable Collection Period
Remained relatively stable with a slight peak in 2023, indicating mostly consistent receivables management.
Operating Cycle
Shortened significantly in 2021 but extended progressively thereafter, suggesting a longer duration to complete the full cash conversion process in recent periods.

Average Payables Payment Period

Eli Lilly & Co., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Payables turnover 2.61 2.73 3.43 4.38 3.41
Short-term Activity Ratio (no. days)
Average payables payment period1 140 134 106 83 107
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
AbbVie Inc. 64 66 61 60 54
Amgen Inc. 54 69 90 77 84
Bristol-Myers Squibb Co. 94 111 109 108 84
Danaher Corp. 66 65 67 82 76
Gilead Sciences Inc. 49 31 58 39 67
Johnson & Johnson 137 132 137 135 122
Merck & Co. Inc. 98 89 89 123 108
Pfizer Inc. 115 98 72 66 181
Regeneron Pharmaceuticals Inc. 146 122 138 84 155
Thermo Fisher Scientific Inc. 45 41 48 53 49
Vertex Pharmaceuticals Inc. 98 106 103 79 77
Average Payables Payment Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences 90 86 85 86 95
Average Payables Payment Period, Industry
Health Care 45 46 49 48 49

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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 2.61 = 140

2 Click competitor name to see calculations.


Payables Turnover
The payables turnover ratio demonstrates a fluctuating trend over the observed periods. The ratio increased notably from 3.41 in 2020 to 4.38 in 2021, indicating a faster rate of paying off suppliers during that year. However, starting in 2022, the ratio declined each year, dropping to 3.43, then to 2.73 in 2023, and further down to 2.61 by 2024. This decreasing trend implies a progressively slower payment cycle over the last three years.
Average Payables Payment Period
The average payables payment period exhibits an inversely related pattern to the payables turnover ratio. It decreased significantly from 107 days in 2020 to 83 days in 2021, aligning with the higher turnover ratio that year. Subsequently, the payment period increased substantially from 106 days in 2022 to 134 days in 2023 and extended further to 140 days in 2024. This upward trend signifies that the company is taking longer to settle its payables in recent years.
Overall Insights
The data reveal a shift in payment practices over the analyzed timeframe. Initially, there was an improvement in payment efficiency between 2020 and 2021, as reflected by a higher payables turnover and shorter payment period. From 2022 onward, the trend reversed, with payments being made more slowly, which may impact supplier relations or reflect strategic cash flow management. The consistent lengthening of the payment period and corresponding decline in turnover ratio suggest a deliberate extension of payable terms or possible liquidity considerations.

Cash Conversion Cycle

Eli Lilly & Co., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Average inventory processing period 329 298 237 194 265
Average receivable collection period 89 97 88 86 87
Average payables payment period 140 134 106 83 107
Short-term Activity Ratio
Cash conversion cycle1 278 261 219 197 245
Benchmarks
Cash Conversion Cycle, Competitors2
AbbVie Inc. 97 82 85 70 95
Amgen Inc. 222 441 273 228 215
Bristol-Myers Squibb Co. 43 54 42 34 44
Danaher Corp. 76 91 81 63 75
Gilead Sciences Inc. 107 132 104 111 140
Johnson & Johnson 89 86 72 51 58
Merck & Co. Inc. 107 118 93 105 101
Pfizer Inc. 173 120 63 92 225
Regeneron Pharmaceuticals Inc. 586 555 584 345 647
Thermo Fisher Scientific Inc. 97 101 97 115 107
Vertex Pharmaceuticals Inc. 242 166 112 119 114
Cash Conversion Cycle, Sector
Pharmaceuticals, Biotechnology & Life Sciences 128 131 97 97 112
Cash Conversion Cycle, Industry
Health Care 36 39 32 34 38

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 conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 329 + 89140 = 278

2 Click competitor name to see calculations.


The analysis of the annual financial timing metrics reveals several notable trends and changes over the five-year period under review.

Average Inventory Processing Period
This metric exhibits a fluctuating yet upward trend. Beginning at 265 days in 2020, it decreased substantially to 194 days in 2021, indicating a more efficient inventory turnover during that year. However, from 2021 onwards, the period steadily increased year-over-year, reaching 329 days by 2024. This indicates a lengthening duration to process inventory, which could suggest challenges in inventory management or shifts in product demand or supply chain dynamics.
Average Receivable Collection Period
The receivable collection period remains relatively stable throughout the timeline, fluctuating only slightly. Starting at 87 days in 2020, it decreased marginally to 86 days in 2021, then increased to 88 days in 2022, peaked temporarily at 97 days in 2023, before settling back to 89 days in 2024. Overall, these small variations suggest consistent credit management and collection efficiency, with a minor increase in collection time during 2023.
Average Payables Payment Period
This period shows a substantial increase over the timeframe. Initially recorded at 107 days in 2020, it dropped to 83 days in 2021 but thereafter grew consistently each year, reaching 140 days by 2024. The lengthening of this payment period may reflect extended supplier credit terms or strategic cash management efforts to defer payments. The shorter period in 2021 could have been an anomaly or linked to specific operational or market conditions.
Cash Conversion Cycle
The cash conversion cycle, representing the net time between cash outflows for payables and cash inflows from receivables, mirrors the trends observed primarily in inventory and payables periods. After a reduction from 245 days in 2020 to 197 days in 2021, it progressively increased to 278 days in 2024. This suggests that the company is taking longer to convert its investments in inventory and other resources into cash inflows. The increase could impact liquidity and working capital management, signaling a need for review of operational efficiencies and payment terms.

In summary, the data indicates a period of tightening inventory processing efficiency in the early years followed by a consistent decline, alongside a gradual lengthening of payables payment terms. Receivable collection remains relatively stable. The overall effect has been an extended cash conversion cycle after an initial improvement, which could affect cash flow management and operational flexibility in the most recent years.