Ligand Pharmaceuticals Incorporated (LGND)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	22,954	45,006	19,522	47,619	71,543
Short-term investments	US$ in thousands	147,355	166,864	321,586	363,567	998,324
Receivables	US$ in thousands	39,312	35,038	91,646	59,064	41,748
Total current liabilities	US$ in thousands	16,782	98,810	41,665	100,111	17,002
Quick ratio		12.49	2.50	10.39	4.70	65.38

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($22,954K + $147,355K + $39,312K) ÷ $16,782K
= 12.49

The quick ratio of Ligand Pharmaceuticals, Inc. has fluctuated over the past five years, ranging from 65.66 in 2019 to 2.53 in 2022. The quick ratio measures the company's ability to meet its short-term obligations using its most liquid assets, excluding inventory. A higher quick ratio indicates a stronger liquidity position, as the company has more liquid assets to cover its current liabilities.

In 2023, the quick ratio significantly increased to 12.72, reflecting a substantial improvement in the company's liquidity position compared to the previous year. This sharp increase suggests that Ligand Pharmaceuticals has significantly more liquid assets relative to its current liabilities, indicating improved financial health and better ability to meet its short-term obligations.

It is important to note that a quick ratio of 12.72 may indicate an excess of highly liquid assets that could be better utilized in generating returns for the company, rather than sitting idle. To assess the overall liquidity and financial health of Ligand Pharmaceuticals, it is recommended to analyze other financial ratios and metrics in conjunction with the quick ratio.