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.