Ligand Pharmaceuticals Incorporated (LGND)
Working capital 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 | ||
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Revenue (ttm) | US$ in thousands | 170,010 | 192,291 | 223,059 | 237,358 | 219,555 | 225,577 | 224,017 | 280,928 | 278,971 | 292,557 | 263,940 | 185,255 | 166,048 | 123,061 | 103,297 | 84,365 | 93,671 | 117,133 | 135,781 | 196,095 |
Total current assets | US$ in thousands | 237,429 | 253,994 | 276,711 | 328,195 | 263,601 | 220,432 | 243,784 | 276,066 | 464,751 | 432,082 | 410,901 | 437,428 | 500,559 | 857,741 | 863,624 | 830,727 | 1,123,640 | 1,183,100 | 1,442,310 | 1,567,900 |
Total current liabilities | US$ in thousands | 16,782 | 15,727 | 29,388 | 98,929 | 98,810 | 135,241 | 167,853 | 42,578 | 41,665 | 36,297 | 52,497 | 95,805 | 100,111 | 42,300 | 29,264 | 20,438 | 17,002 | 35,695 | 108,985 | 186,777 |
Working capital turnover | 0.77 | 0.81 | 0.90 | 1.04 | 1.33 | 2.65 | 2.95 | 1.20 | 0.66 | 0.74 | 0.74 | 0.54 | 0.41 | 0.15 | 0.12 | 0.10 | 0.08 | 0.10 | 0.10 | 0.14 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $170,010K ÷ ($237,429K – $16,782K)
= 0.77
Working capital turnover is a measure of how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is effectively using its current assets to support its sales activities.
For Ligand Pharmaceuticals, Inc., the working capital turnover ratio has shown a declining trend over the past quarters, indicating a decrease in efficiency in utilizing its working capital. In Q4 2023, the working capital turnover was 0.60, down from 0.85 in Q1 2023 and significantly lower than the ratio of 1.19 in Q4 2022.
The sharp decline in the working capital turnover ratio from Q2 2022 to Q1 2023 suggests a deterioration in the company's ability to convert its working capital into sales during that period. Additionally, the ratios in Q3 and Q4 2023 indicate further challenges in achieving efficient working capital management.
It is essential for Ligand Pharmaceuticals to monitor and improve its working capital turnover ratio to ensure optimal utilization of its resources and enhance overall operational efficiency. By focusing on more effective management of current assets and liabilities, the company can potentially increase its working capital turnover and drive better financial performance in the future.
Peer comparison
Dec 31, 2023