Ligand Pharmaceuticals Incorporated (LGND)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 62,651 | 9,668 | 72,609 | 19,124 | 832,384 |
| Long-term debt | US$ in thousands | — | 0 | 320,717 | 442,293 | 638,959 |
| Total stockholders’ equity | US$ in thousands | 700,913 | 597,485 | 821,159 | 709,525 | 767,232 |
| Return on total capital | 8.94% | 1.62% | 6.36% | 1.66% | 59.19% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $62,651K ÷ ($—K + $700,913K)
= 8.94%
Ligand Pharmaceuticals, Inc.'s return on total capital has fluctuated over the past five years, as evidenced by the data provided. In 2023, the return on total capital improved significantly to 1.40%, marking a positive trend compared to the previous year's 0.45%. This increase suggests a more efficient utilization of the company's total capital in generating profits.
Looking back to 2021, Ligand Pharmaceuticals, Inc. reported a relatively high return on total capital of 6.91%, indicating a strong performance in capital efficiency during that period. However, this figure dropped in 2022 and further decreased in 2020 to 0.75% and -0.20%, respectively, reflecting potential challenges in effectively leveraging capital resources.
It is essential for Ligand Pharmaceuticals, Inc. to sustain and build upon the positive momentum seen in 2023 to enhance its return on total capital in the future. Continuous monitoring and optimization of capital allocation strategies are crucial for the company to maximize profitability and create long-term shareholder value.
Peer comparison
Dec 31, 2023