Ligand Pharmaceuticals Incorporated (LGND)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	72,307	22,954	45	19,522	47,619
Short-term investments	US$ in thousands	183,858	147,355	167	321,586	363,567
Total current liabilities	US$ in thousands	37,112	16,782	98,810	41,665	100,111
Cash ratio		6.90	10.15	0.00	8.19	4.11

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($72,307K + $183,858K) ÷ $37,112K
= 6.90

The cash ratio of Ligand Pharmaceuticals Incorporated has exhibited variability over the past five years.

As of December 31, 2020, the cash ratio was 4.11, indicating that the company had $4.11 in cash and cash equivalents for every $1 of current liabilities. This suggests a relatively healthy liquidity position.

The cash ratio significantly improved to 8.19 by December 31, 2021, signaling a stronger ability to cover short-term liabilities with its available cash reserves.

However, there was a notable decrease in the cash ratio to 0.00 by December 31, 2022, which could indicate a potential liquidity issue or a significant shift in the company's cash management strategies.

The cash ratio rebounded significantly to 10.15 by December 31, 2023, reflecting a substantial increase in available cash compared to short-term obligations, which could signify improved liquidity and financial health.

By December 31, 2024, the cash ratio stood at 6.90, suggesting that Ligand Pharmaceuticals Incorporated continued to maintain a reasonable level of liquidity relative to its current liabilities.

Overall, the fluctuation in the cash ratio over the analyzed period highlights the importance of effective cash management and the potential impact on the company's ability to meet short-term financial obligations.