Intrinsic value of Eli Lilly - LLY

Previous Close

$102.44

  Intrinsic Value

$51.30

stock screener

  Rating & Target

sell

-50%

Previous close

$102.44

 
Intrinsic value

$51.30

 
Up/down potential

-50%

 
Rating

sell

We calculate the intrinsic value of LLY stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 107.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.21
  6.08
  5.98
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
  5.28
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
  5.13
Revenue, $m
  24,655
  26,509
  28,436
  30,438
  32,519
  34,683
  36,933
  39,274
  41,711
  44,249
  46,894
  49,650
  52,525
  55,526
  58,657
  61,929
  65,346
  68,919
  72,654
  76,562
  80,651
  84,930
  89,411
  94,103
  99,019
  104,169
  109,565
  115,222
  121,152
  127,369
Variable operating expenses, $m
  20,669
  22,160
  23,710
  25,320
  26,994
  28,734
  30,544
  32,427
  34,387
  36,428
  37,715
  39,933
  42,245
  44,658
  47,177
  49,808
  52,556
  55,430
  58,434
  61,577
  64,865
  68,307
  71,911
  75,685
  79,638
  83,780
  88,121
  92,670
  97,440
  102,440
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  20,669
  22,160
  23,710
  25,320
  26,994
  28,734
  30,544
  32,427
  34,387
  36,428
  37,715
  39,933
  42,245
  44,658
  47,177
  49,808
  52,556
  55,430
  58,434
  61,577
  64,865
  68,307
  71,911
  75,685
  79,638
  83,780
  88,121
  92,670
  97,440
  102,440
Operating income, $m
  3,986
  4,349
  4,726
  5,118
  5,525
  5,948
  6,389
  6,847
  7,324
  7,821
  9,178
  9,718
  10,280
  10,868
  11,481
  12,121
  12,790
  13,489
  14,220
  14,985
  15,785
  16,623
  17,500
  18,418
  19,380
  20,388
  21,445
  22,552
  23,712
  24,929
EBITDA, $m
  6,648
  7,147
  7,667
  8,207
  8,768
  9,351
  9,958
  10,589
  11,246
  11,931
  12,644
  13,387
  14,162
  14,971
  15,815
  16,697
  17,619
  18,582
  19,589
  20,643
  21,745
  22,899
  24,107
  25,372
  26,698
  28,086
  29,541
  31,067
  32,665
  34,342
Interest expense (income), $m
  146
  737
  879
  1,025
  1,177
  1,335
  1,499
  1,669
  1,847
  2,032
  2,224
  2,424
  2,633
  2,850
  3,077
  3,313
  3,560
  3,818
  4,088
  4,370
  4,664
  4,973
  5,295
  5,633
  5,986
  6,356
  6,744
  7,150
  7,576
  8,022
  8,490
Earnings before tax, $m
  3,249
  3,470
  3,701
  3,941
  4,190
  4,449
  4,719
  5,000
  5,292
  5,597
  6,754
  7,085
  7,430
  7,791
  8,167
  8,560
  8,971
  9,401
  9,850
  10,320
  10,813
  11,328
  11,867
  12,432
  13,024
  13,644
  14,294
  14,976
  15,690
  16,439
Tax expense, $m
  877
  937
  999
  1,064
  1,131
  1,201
  1,274
  1,350
  1,429
  1,511
  1,824
  1,913
  2,006
  2,104
  2,205
  2,311
  2,422
  2,538
  2,660
  2,787
  2,919
  3,058
  3,204
  3,357
  3,516
  3,684
  3,859
  4,043
  4,236
  4,439
Net income, $m
  2,372
  2,533
  2,702
  2,877
  3,059
  3,248
  3,445
  3,650
  3,863
  4,086
  4,931
  5,172
  5,424
  5,687
  5,962
  6,249
  6,549
  6,863
  7,191
  7,534
  7,893
  8,269
  8,663
  9,075
  9,508
  9,960
  10,435
  10,932
  11,454
  12,001

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  48,533
  52,183
  55,976
  59,917
  64,014
  68,273
  72,702
  77,311
  82,108
  87,105
  92,310
  97,737
  103,397
  109,302
  115,468
  121,907
  128,634
  135,667
  143,020
  150,712
  158,761
  167,185
  176,006
  185,243
  194,919
  205,056
  215,680
  226,815
  238,488
  250,727
Adjusted assets (=assets-cash), $m
  48,533
  52,183
  55,976
  59,917
  64,014
  68,273
  72,702
  77,311
  82,108
  87,105
  92,310
  97,737
  103,397
  109,302
  115,468
  121,907
  128,634
  135,667
  143,020
  150,712
  158,761
  167,185
  176,006
  185,243
  194,919
  205,056
  215,680
  226,815
  238,488
  250,727
Revenue / Adjusted assets
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
Average production assets, $m
  18,220
  19,590
  21,014
  22,494
  24,031
  25,630
  27,293
  29,023
  30,824
  32,700
  34,654
  36,692
  38,816
  41,033
  43,348
  45,765
  48,291
  50,931
  53,692
  56,579
  59,601
  62,763
  66,075
  69,542
  73,175
  76,981
  80,969
  85,149
  89,531
  94,126
Working capital, $m
  3,279
  3,526
  3,782
  4,048
  4,325
  4,613
  4,912
  5,223
  5,548
  5,885
  6,237
  6,603
  6,986
  7,385
  7,801
  8,236
  8,691
  9,166
  9,663
  10,183
  10,727
  11,296
  11,892
  12,516
  13,169
  13,854
  14,572
  15,325
  16,113
  16,940
Total debt, $m
  16,270
  18,978
  21,792
  24,717
  27,756
  30,916
  34,203
  37,623
  41,183
  44,890
  48,752
  52,779
  56,978
  61,360
  65,935
  70,713
  75,705
  80,923
  86,379
  92,087
  98,059
  104,310
  110,854
  117,708
  124,888
  132,410
  140,293
  148,555
  157,216
  166,298
Total liabilities, $m
  36,012
  38,720
  41,534
  44,458
  47,498
  50,658
  53,945
  57,365
  60,924
  64,632
  68,494
  72,521
  76,720
  81,102
  85,677
  90,455
  95,447
  100,665
  106,121
  111,828
  117,801
  124,052
  130,596
  137,450
  144,630
  152,152
  160,035
  168,297
  176,958
  186,040
Total equity, $m
  12,522
  13,463
  14,442
  15,459
  16,516
  17,614
  18,757
  19,946
  21,184
  22,473
  23,816
  25,216
  26,676
  28,200
  29,791
  31,452
  33,188
  35,002
  36,899
  38,884
  40,960
  43,134
  45,409
  47,793
  50,289
  52,905
  55,645
  58,518
  61,530
  64,688
Total liabilities and equity, $m
  48,534
  52,183
  55,976
  59,917
  64,014
  68,272
  72,702
  77,311
  82,108
  87,105
  92,310
  97,737
  103,396
  109,302
  115,468
  121,907
  128,635
  135,667
  143,020
  150,712
  158,761
  167,186
  176,005
  185,243
  194,919
  205,057
  215,680
  226,815
  238,488
  250,728
Debt-to-equity ratio
  1.300
  1.410
  1.510
  1.600
  1.680
  1.760
  1.820
  1.890
  1.940
  2.000
  2.050
  2.090
  2.140
  2.180
  2.210
  2.250
  2.280
  2.310
  2.340
  2.370
  2.390
  2.420
  2.440
  2.460
  2.480
  2.500
  2.520
  2.540
  2.560
  2.570
Adjusted equity ratio
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258
  0.258

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,372
  2,533
  2,702
  2,877
  3,059
  3,248
  3,445
  3,650
  3,863
  4,086
  4,931
  5,172
  5,424
  5,687
  5,962
  6,249
  6,549
  6,863
  7,191
  7,534
  7,893
  8,269
  8,663
  9,075
  9,508
  9,960
  10,435
  10,932
  11,454
  12,001
Depreciation, amort., depletion, $m
  2,662
  2,799
  2,941
  3,089
  3,243
  3,403
  3,569
  3,742
  3,922
  4,110
  3,465
  3,669
  3,882
  4,103
  4,335
  4,577
  4,829
  5,093
  5,369
  5,658
  5,960
  6,276
  6,607
  6,954
  7,317
  7,698
  8,097
  8,515
  8,953
  9,413
Funds from operations, $m
  5,033
  5,332
  5,643
  5,966
  6,302
  6,651
  7,014
  7,392
  7,786
  8,196
  8,396
  8,841
  9,306
  9,791
  10,297
  10,826
  11,378
  11,956
  12,560
  13,192
  13,853
  14,546
  15,270
  16,030
  16,825
  17,658
  18,532
  19,447
  20,407
  21,413
Change in working capital, $m
  237
  247
  256
  266
  277
  288
  299
  311
  324
  338
  352
  367
  382
  399
  417
  435
  455
  475
  497
  520
  544
  569
  596
  624
  654
  685
  718
  752
  789
  827
Cash from operations, $m
  4,796
  5,085
  5,387
  5,700
  6,025
  6,363
  6,715
  7,081
  7,462
  7,858
  8,044
  8,475
  8,923
  9,392
  9,880
  10,391
  10,924
  11,481
  12,063
  12,672
  13,309
  13,976
  14,674
  15,406
  16,171
  16,973
  17,814
  18,695
  19,618
  20,587
Maintenance CAPEX, $m
  -1,690
  -1,822
  -1,959
  -2,101
  -2,249
  -2,403
  -2,563
  -2,729
  -2,902
  -3,082
  -3,270
  -3,465
  -3,669
  -3,882
  -4,103
  -4,335
  -4,577
  -4,829
  -5,093
  -5,369
  -5,658
  -5,960
  -6,276
  -6,607
  -6,954
  -7,317
  -7,698
  -8,097
  -8,515
  -8,953
New CAPEX, $m
  -1,315
  -1,370
  -1,424
  -1,480
  -1,538
  -1,599
  -1,663
  -1,730
  -1,801
  -1,876
  -1,954
  -2,037
  -2,125
  -2,217
  -2,315
  -2,417
  -2,526
  -2,640
  -2,761
  -2,888
  -3,022
  -3,163
  -3,311
  -3,468
  -3,632
  -3,806
  -3,988
  -4,180
  -4,382
  -4,595
Cash from investing activities, $m
  -3,005
  -3,192
  -3,383
  -3,581
  -3,787
  -4,002
  -4,226
  -4,459
  -4,703
  -4,958
  -5,224
  -5,502
  -5,794
  -6,099
  -6,418
  -6,752
  -7,103
  -7,469
  -7,854
  -8,257
  -8,680
  -9,123
  -9,587
  -10,075
  -10,586
  -11,123
  -11,686
  -12,277
  -12,897
  -13,548
Free cash flow, $m
  1,790
  1,893
  2,004
  2,119
  2,238
  2,361
  2,489
  2,621
  2,758
  2,900
  2,820
  2,972
  3,130
  3,293
  3,462
  3,638
  3,821
  4,012
  4,209
  4,415
  4,630
  4,854
  5,087
  5,330
  5,585
  5,850
  6,128
  6,418
  6,721
  7,039
Issuance/(repayment) of debt, $m
  2,623
  2,708
  2,814
  2,924
  3,040
  3,160
  3,287
  3,420
  3,560
  3,707
  3,863
  4,027
  4,200
  4,382
  4,575
  4,778
  4,992
  5,218
  5,456
  5,707
  5,972
  6,251
  6,545
  6,854
  7,179
  7,522
  7,883
  8,262
  8,661
  9,081
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,623
  2,708
  2,814
  2,924
  3,040
  3,160
  3,287
  3,420
  3,560
  3,707
  3,863
  4,027
  4,200
  4,382
  4,575
  4,778
  4,992
  5,218
  5,456
  5,707
  5,972
  6,251
  6,545
  6,854
  7,179
  7,522
  7,883
  8,262
  8,661
  9,081
Total cash flow (excl. dividends), $m
  4,413
  4,601
  4,818
  5,043
  5,277
  5,521
  5,776
  6,041
  6,318
  6,607
  6,683
  6,999
  7,329
  7,675
  8,037
  8,416
  8,813
  9,230
  9,666
  10,123
  10,602
  11,105
  11,632
  12,184
  12,764
  13,372
  14,010
  14,680
  15,383
  16,120
Retained Cash Flow (-), $m
  -930
  -942
  -979
  -1,017
  -1,057
  -1,099
  -1,143
  -1,189
  -1,238
  -1,289
  -1,343
  -1,400
  -1,460
  -1,524
  -1,591
  -1,661
  -1,736
  -1,814
  -1,897
  -1,985
  -2,077
  -2,174
  -2,276
  -2,383
  -2,496
  -2,616
  -2,741
  -2,873
  -3,012
  -3,158
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  274
  296
  318
  341
  365
  390
  416
  443
  471
  501
  531
  563
  596
  630
  666
  704
  743
  784
  827
  872
  919
  968
  1,019
  1,073
  1,129
  1,188
  1,250
  1,315
  1,383
  1,454
Cash available for distribution, $m
  3,483
  3,660
  3,839
  4,026
  4,221
  4,423
  4,633
  4,852
  5,080
  5,318
  5,339
  5,598
  5,869
  6,151
  6,446
  6,755
  7,078
  7,415
  7,768
  8,138
  8,525
  8,931
  9,356
  9,801
  10,268
  10,757
  11,270
  11,807
  12,371
  12,962
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  3,340
  3,350
  3,341
  3,315
  3,271
  3,210
  3,130
  3,033
  2,918
  2,788
  2,536
  2,389
  2,231
  2,065
  1,893
  1,717
  1,540
  1,366
  1,196
  1,034
  882
  741
  613
  499
  399
  314
  242
  183
  135
  98
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Eli Lilly and Company is engaged in drug manufacturing business. The Company discovers, develops, manufactures and markets products in two segments: human pharmaceutical products and animal health products. The Company's human pharmaceutical business segment sells medicines, which are discovered or developed by its scientists. Its animal health business segment operates through the Company's Elanco division, which develops, manufactures and markets products for both food animals and companion animals. The Company's human pharmaceutical products include endocrinology products, neuroscience products, oncology products, immunology products and cardiovascular products. The Company's animal health products segment includes products for food animals and products for companion animals. As of December 31, 2016, the Company manufactured and distributed its products through facilities in the United States, Puerto Rico and 14 other countries.

FINANCIAL RATIOS  of  Eli Lilly (LLY)

Valuation Ratios
P/E Ratio 41.2
Price to Sales 5.3
Price to Book 8.1
Price to Tangible Book
Price to Cash Flow 23.2
Price to Free Cash Flow 30
Growth Rates
Sales Growth Rate 6.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -32.8%
Cap. Spend. - 3 Yr. Gr. Rate -0%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 59.7%
Total Debt to Equity 73.6%
Interest Coverage 24
Management Effectiveness
Return On Assets 7.7%
Ret/ On Assets - 3 Yr. Avg. 7.2%
Return On Total Capital 11.7%
Ret/ On T. Cap. - 3 Yr. Avg. 10.8%
Return On Equity 19.2%
Return On Equity - 3 Yr. Avg. 16.6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 73.4%
Gross Margin - 3 Yr. Avg. 74.3%
EBITDA Margin 23.6%
EBITDA Margin - 3 Yr. Avg. 22.8%
Operating Margin 16.3%
Oper. Margin - 3 Yr. Avg. 14.2%
Pre-Tax Margin 15.9%
Pre-Tax Margin - 3 Yr. Avg. 15.1%
Net Profit Margin 12.9%
Net Profit Margin - 3 Yr. Avg. 12.4%
Effective Tax Rate 18.9%
Eff/ Tax Rate - 3 Yr. Avg. 17.6%
Payout Ratio 78.9%

LLY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LLY stock intrinsic value calculation we used $22871 million for the last fiscal year's total revenue generated by Eli Lilly. The default revenue input number comes from 2017 income statement of Eli Lilly. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our LLY stock valuation model: a) initial revenue growth rate of 7.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for LLY is calculated based on our internal credit rating of Eli Lilly, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Eli Lilly.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of LLY stock the variable cost ratio is equal to 84.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for LLY stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Eli Lilly.

Corporate tax rate of 27% is the nominal tax rate for Eli Lilly. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the LLY stock is equal to 1.2%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for LLY are equal to 73.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Eli Lilly operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for LLY is equal to 13.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11592 million for Eli Lilly - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1052 million for Eli Lilly is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Eli Lilly at the current share price and the inputted number of shares is $107.8 billion.

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COMPANY NEWS

▶ Eli Lilly's Overbought Stock Poised to Fall 15%   [Aug-16-18 02:00PM  Investopedia]
▶ [$$] Karuna Appoints Steven Paul as CEO   [Aug-15-18 05:39PM  The Wall Street Journal]
▶ Eli Lilly Stock History   [Aug-10-18 08:08AM  Motley Fool]
▶ Is Eli Lilly (LLY) a Great Dividend Play?   [Aug-08-18 09:15AM  Zacks]
▶ Why Health Care Stocks Are Outshining The Techs   [Aug-07-18 01:00PM  Investopedia]
▶ Does Bausch Face A Reckoning? 5 Key Issues To Look For In Its Earnings   [Aug-06-18 04:08PM  Investor's Business Daily]
▶ Diabetes Superpower Eli Lilly's Results   [05:24PM  Motley Fool]
▶ Here's What's Going On at Eli Lilly and GlaxoSmithKline   [Aug-01-18 05:24PM  Motley Fool]
▶ Why The 'Heat Wave' For U.S. Pharma Could Continue This Month   [04:12PM  Investor's Business Daily]
▶ [$$] Trump is losing the war on drug prices   [12:00AM  Financial Times]
▶ Tech Turmoil Ruins GDP Party   [Jul-28-18 09:15AM  Zacks]
▶ [$$] Rosy Outlook for Lilly   [Jul-27-18 08:27PM  Barrons.com]
▶ Company News For Jul 25, 2018   [10:49AM  Zacks]
▶ Earnings Boost U.S. Stocks   [Jul-24-18 11:40PM  The Wall Street Journal]
▶ Eli Lilly Shares Climb on Earnings Beat   [09:08AM  TheStreet.com]
▶ Eli Lilly's Q2 Earnings Preview   [Jul-23-18 03:52PM  Benzinga]
▶ [$$] Pakistan election, Juncker visits Trump, US tech earnings   [Jul-21-18 11:29PM  Financial Times]
▶ Eli Lilly Scores a Win in Diabetes   [07:31AM  Motley Fool]
▶ Pfizer, Eli Lilly non-opioid pain drug nears finish line   [Jul-18-18 03:26PM  MarketWatch]
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