Ligand Pharmaceuticals Incorporated (LGND)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	133,379	199,338	288,204	176,413	85,278
Total current assets	US$ in thousands	237,429	263,601	464,751	500,559	1,123,640
Total current liabilities	US$ in thousands	16,782	98,810	41,665	100,111	17,002
Working capital turnover		0.60	1.21	0.68	0.44	0.08

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $133,379K ÷ ($237,429K – $16,782K)
= 0.60

Ligand Pharmaceuticals, Inc.'s working capital turnover ratio has fluctuated over the past five years, ranging from as low as 0.11 in 2019 to as high as 1.19 in 2022. The working capital turnover indicates how efficiently the company is utilizing its working capital to generate sales revenue. A higher turnover ratio is generally preferred as it signifies that the company is effectively managing its working capital to support its operations.

In 2023, the working capital turnover ratio decreased to 0.60 from 1.19 in 2022, suggesting a decline in the efficiency of working capital utilization for revenue generation. This decrease may be attributed to various factors, such as changes in inventory management, accounts receivable collection, or accounts payable practices.

Overall, it is essential for Ligand Pharmaceuticals, Inc. to closely monitor its working capital turnover ratio and identify any inefficiencies in working capital management to improve operational efficiency and financial performance in the future.