Ligand Pharmaceuticals Incorporated (LGND)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	465.20	249.61	91.85	160.42	317.82
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	465.20	249.61	91.85	160.42	317.82

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 465.20 + — – —
= 465.20

The cash conversion cycle of Ligand Pharmaceuticals Incorporated has exhibited fluctuations over the past few years. In 2020, the company had a relatively long cash conversion cycle of 317.82 days, indicating that it took a considerable amount of time to convert its resources invested in operations back into cash.

However, there was a significant improvement in 2021, with the cash conversion cycle decreasing to 160.42 days, suggesting a more efficient operation in terms of cash flow management. This trend continued in 2022, with the cycle further decreasing to 91.85 days, reflecting an enhanced ability to convert inventories into sales and, ultimately, cash.

In 2023, there was a notable increase in the cash conversion cycle to 249.61 days, implying a potential slowdown in the conversion of resources back into cash. This uptrend continued into 2024, with the cycle significantly extending to 465.20 days, indicating a longer duration for the company to cycle through its cash conversion process compared to the previous years.

Overall, while Ligand Pharmaceuticals Incorporated demonstrated improved cash conversion efficiency in 2021 and 2022, the subsequent years saw fluctuations and a notable increase in the time taken to convert resources into cash. This suggests the need for the company to closely monitor and manage its working capital and operational efficiency to maintain a healthy cash conversion cycle in the future.