Ligand Pharmaceuticals Incorporated (LGND)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	97,156	158,189	214,026	141,696	86,995
Inventory	US$ in thousands	23,969	13,294	27,326	26,487	7,296
Inventory turnover		4.05	11.90	7.83	5.35	11.92

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $97,156K ÷ $23,969K
= 4.05

The inventory turnover ratio for Ligand Pharmaceuticals, Inc. has fluctuated over the past five years. In 2023, the inventory turnover ratio decreased significantly to 0.44, indicating that the company's inventory remained in stock for a longer period compared to the previous year. This could suggest potential issues with inventory management or slowing sales.

In contrast, the inventory turnover ratio was highest in 2022 at 3.97, demonstrating that the company effectively managed its inventory, sold products efficiently, and restocked inventory multiple times throughout the year. The strong inventory turnover in 2022 could indicate effective demand forecasting and inventory control measures.

In 2021, the inventory turnover ratio was 2.28, showing a moderate level of inventory turnover compared to the previous and subsequent years. This suggests that the company maintained a balance between inventory levels and sales volume during that period.

The inventory turnover ratios in 2020 and 2019 were 1.15 and 1.56, respectively. These lower ratios indicate that the company took longer to sell its inventory during those years, which could signal overstocking or slower sales growth.

Overall, the analysis of Ligand Pharmaceuticals, Inc.'s inventory turnover ratios reveals fluctuations in inventory management efficiency over the five-year period, highlighting the importance of closely monitoring inventory levels and sales performance to optimize operational efficiency and financial performance.