Eli Lilly and Company — Earnings Quality Grade F
LLY · Healthcare
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO increased by 10 days
AR growth 61.4% vs revenue growth 44.7%
Revenue 44.7%, CFFO 90.7%. Cash follows revenue
Expense Quality
Inventory growth 81.1% exceeds COGS 31.3%
CapEx growth 29.1% vs revenue 44.7%. Normal
SG&A/Gross Profit = 20.5%, excellent (<30%)
Gross margin 83.0%, change +1.7pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
FCF < 50% of Net Income for 3 years
Accruals ratio = 3.4%. Low accruals
Cash $7.3B covers only 17% of debt $42.5B
Balance Sheet Health
Goodwill+Intangibles $12.4B = 47% of equity
Debt/EBITDA = 1.3x. Healthy
Other assets 22.2% vs revenue 44.7%. Normal
Write-offs normal
Acquisition Risk
FCF after acquisitions negative for 2/3 years
Goodwill+Intangibles change 4% YoY. Normal
Manipulation Score
M-Score = -1.85 (grey zone)
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-08