Question

Using the condensed summary financial statements for Eli Lilly & Company (included on the following page), calculate the following ratios for Eli Lilly for 2019:

1. Current Ratio

2. Accounts Receivable Turnover

3. Average Days in Inventory (also known as Average Days to Sell Inventory)

4. Gross Profit Percentage

5. Debt to Assets Ratio

PROBLEM 3, continued

Eli Lilly & Company Summary Condensed Balance Sheet $ in Millions
Assets	Dec. 31, 2019	Dec. 31, 2018		Liabilities and Equity	Dec. 31, 2019	Dec. 31, 2018
Cash and cash equivalents	$ 2,338	$ 7,321		Short-term borrowings	$ 1,499	$ 1,102
Short-term investments	101	88		Accounts payable	1,405	1,207
Accounts receivable, net	4,547	4,594		Sales rebates and discounts	4,934	4,850
Inventories	3,191	3,098		Other current liabilities	3,937	4,729
Prepaid expenses and other current assets	3,533	5,449		Long-term debt and other non-current liabilities	24,812	21,111
Non-current investments	1,962	2,005		Common stock	7,284	7,245
Property and equipment, net	8,405	7,996		Retained earnings	4,920	11,396
Goodwill & intangibles	10,297	2,434		Accumulated other comprehensive loss	(6,524)	(5,729)
Other noncurrent assets	4,912	10,923		Treasury stock and other equity	(2,982)	(2,002)
Total assets	$39,286	$43,908		Total liabilities and equity	$39,286	$43,908

Eli Lilly & Company Summary Income Statement $ in Millions
	2019	2018
Net Sales	$22,320	$21,493
Cost of goods sold	4,721	4,682
Operating expenses	12,624	13,277
Other income, net	292	146
Income taxes	628	530
Income from discontinued operations, net	3,681	81
Net income	$ 8,318	$ 3,232

Answer 1

Ratio	Equation	In Amounts	Answer
Current Ratio	Current Asset / Current Liability	13710 / 11775	1.16
Accounts Receivable Turn Over	Net Sales / Average Accounts Receivable	22320 / 4570.5	4.88
Average Days In Inventory	(Average Inventory / Cost of Goods Sold) x 365	(3144.5 / 4721) x 365	243.11
Gross Profit Percentage	(Gross Profit / Net Sales) x 100%	(17599 / 22320) x 100%	78.8%
Debt to Asset Ratio	Total Debt / Total Asset	36587 / 39286	0.93

Avarge Value will found by = (2018 Value + 2019 Value) / 2

Current asset = Cash + ST investemnt + AR + Inventory + Prepaid Expense

Current Liability =  ST Borrowing + AP + Sales Rebates + Other Current Liability

Gross Profit = Sales - Cost of goods sold

Total Debt = Current Liability + long term liability