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
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.