Ligand Pharmaceuticals Incorporated (LGND)

Payables turnover

		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
Cost of revenue (ttm)	US$ in thousands	97,156	102,116	119,153	136,428	148,009	129,474	122,049	140,362	138,226	203,008	192,265	156,770	141,696	110,296	97,720	89,531	86,995	70,935	69,356	66,385
Payables	US$ in thousands	2,427	2,475	9,582	6,135	5,307	15,887	19,153	6,972	8,403	7,233	17,273	9,469	3,784	10,169	6,103	3,365	2,420	2,040	2,888	5,061
Payables turnover		40.03	41.26	12.44	22.24	27.89	8.15	6.37	20.13	16.45	28.07	11.13	16.56	37.45	10.85	16.01	26.61	35.95	34.77	24.02	13.12

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $97,156K ÷ $2,427K
= 40.03

The payables turnover ratio measures how efficiently a company is managing its accounts payable by calculating how many times a company pays off its average accounts payable balance during a certain period.

Looking at the data provided for Ligand Pharmaceuticals, Inc., we can see fluctuations in the payables turnover ratio over the past eight quarters.

In Q4 2023, the payables turnover ratio was 4.33, indicating that the company paid off its accounts payable balance approximately 4.33 times during that quarter. This ratio was significantly lower than the previous quarter (Q3 2023) where it stood at 12.32, suggesting a decrease in the rate at which the company paid its suppliers.

Comparing Q4 2023 to Q4 2022, we can see a slight decrease in the payables turnover ratio from 9.95 to 4.33. This may signify a change in the company's payment practices or the terms negotiated with its suppliers during this period.

Further analysis shows that the payables turnover ratio has been volatile over the past two years, with fluctuations in each quarter. It is essential for investors and stakeholders to delve deeper into the reasons behind these variations to understand how effectively Ligand Pharmaceuticals is managing its accounts payable and its impact on the company's overall financial health.