Ligand Pharmaceuticals Incorporated (LGND)

Days of inventory on hand (DOH)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover		4.05	4.02	4.43	9.74	11.13	5.80	4.93	5.48	5.06	6.15	4.81	4.24	5.35	8.21	26.40	12.23	11.92	10.81	7.20	5.58
DOH	days	90.05	90.76	82.42	37.49	32.78	62.94	74.09	66.61	72.16	59.33	75.83	85.99	68.23	44.44	13.83	29.84	30.61	33.78	50.72	65.46

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.05
= 90.05

Ligand Pharmaceuticals, Inc.'s days of inventory on hand (DOH) has exhibited considerable fluctuations over the past eight quarters. In Q4 2023, the DOH increased significantly to 832.26 days, indicating a prolonged time for the company to convert its inventory into sales. This surge follows a declining trend from Q3 2023 to Q1 2023, where the DOH ranged from 98.64 days to 304.02 days, suggesting improved inventory management during those quarters compared to Q4 2023.

Comparing the latest quarter to the same quarter a year ago, Q4 2022, where the DOH stood at 91.85 days, there has been a substantial deterioration in inventory turnover efficiency. Notably, Q4 2023's DOH level is significantly higher than the DOH from the past year, indicating either excess inventory buildup or challenges in selling existing inventory.

Overall, the recent spike in Ligand Pharmaceuticals, Inc.'s DOH raises concerns about potential liquidity issues, obsolete inventory risks, or operational inefficiencies. Further examination of the company's inventory management practices and demand forecasting strategies may be warranted to address the prolonged time needed to sell inventory and optimize working capital efficiency.