Ligand Pharmaceuticals Incorporated (LGND)

Short-term

Turnover ratios

Ligand Pharmaceuticals, Inc.'s activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate sales.

1. Inventory turnover: This ratio indicates how many times the company's inventory is sold and replaced within a specific period. Ligand Pharmaceuticals experienced a significant decline in inventory turnover from Q4 2022 to Q4 2023, dropping from 3.97 to 0.44. This suggests that the company may be holding onto inventory longer, which could tie up funds and possibly indicate potential issues with product demand or inventory management.

2. Receivables turnover: This ratio measures how quickly the company collects payments from customers for credit sales. Ligand Pharmaceuticals maintained relatively stable receivables turnover ratios throughout the periods, indicating that the company efficiently collects payments from customers. The ratios ranged from 3.34 to 6.66, with higher turnover generally being more favorable.

3. Payables turnover: This ratio reflects how efficiently the company pays its suppliers. Ligand Pharmaceuticals exhibited fluctuations in payables turnover, with a notable increase in Q3 2023. A higher payables turnover ratio may indicate that the company is paying its suppliers more quickly, which could impact cash flows and relationships with suppliers.

4. Working capital turnover: This ratio measures how efficiently the company utilizes its working capital to generate sales. Ligand Pharmaceuticals experienced a decreasing trend in working capital turnover from Q1 2022 to Q4 2023, dropping from 2.84 to 0.60. A declining trend in this ratio may indicate inefficiencies in utilizing working capital to drive revenue growth.

In summary, while Ligand Pharmaceuticals maintained relatively stable receivables turnover ratios, the company experienced fluctuations in inventory turnover, payables turnover, and a decreasing trend in working capital turnover. It may be beneficial for the company to further analyze and optimize its inventory management and working capital utilization to improve overall efficiency in the coming periods.

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Average number of days

Ligand Pharmaceuticals, Inc.'s activity ratios provide insights into the efficiency of the company's management of its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- Ligand Pharmaceuticals, Inc. showed a fluctuating trend in managing its inventory over the quarters analyzed. There was a considerable increase from Q1 to Q2 2023, followed by a steep decline in Q3 and Q4 2023. The company had a significantly high level of inventory on hand in Q4, which may indicate potential issues with inventory management efficiency, storage costs, or inventory obsolescence.

2. Days of Sales Outstanding (DSO):
- The DSO ratio measures how quickly the company is able to collect its receivables. Ligand Pharmaceuticals, Inc. exhibited a fluctuating trend in DSO, with notable improvements in Q2 and Q3 2023, followed by a slight increase in Q4 2023. The reduction in DSO indicates that the company has been collecting receivables more efficiently in the recent quarters, which is a positive sign for cash flow management.

3. Number of Days of Payables:
- The number of days of payables reflects the average number of days it takes for a company to pay its suppliers. Ligand Pharmaceuticals, Inc. demonstrated fluctuations in the payment period to its suppliers over the quarters. Notably, there was a significant increase in Q2 2022, followed by a decrease in Q3 2022, and another increase in Q4 2023. The company appears to have varying payment practices, which may impact supplier relationships and working capital management.

In conclusion, while Ligand Pharmaceuticals, Inc. has shown improvements in managing its receivables efficiency, there are fluctuations in inventory management and payment practices that may require further attention to enhance overall operational efficiency and cash flow performance.

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Long-term

Ligand Pharmaceuticals, Inc.'s fixed asset turnover ratio has exhibited fluctuations over the past eight quarters, ranging from a low of 7.23 to a high of 16.57. This ratio measures the efficiency of the company's utilization of fixed assets to generate sales revenue, with higher values indicating better utilization. The company's fixed asset turnover has generally been strong, with the ratio consistently above 7.00.

On the other hand, the total asset turnover ratio has also varied but has remained relatively stable compared to the fixed asset turnover. The total asset turnover has ranged from 0.17 to 0.26 over the same period, with a general upward trend observed. This ratio reflects Ligand Pharmaceuticals, Inc.'s ability to generate sales in relation to its total assets, implying that the company has been efficient in utilizing its total assets to generate revenue.

Overall, the company's long-term activity ratios suggest that Ligand Pharmaceuticals, Inc. has been effective in utilizing both fixed and total assets to generate sales revenue. The improvement in the total asset turnover ratio indicates increasing efficiency in generating sales with the given asset base, while the high and relatively stable fixed asset turnover ratio reflects the company's effective management and utilization of fixed assets for revenue generation.