Ligand Pharmaceuticals Incorporated (LGND)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.13 | 1.12 | 1.28 | 1.58 | 1.92 |
The solvency ratios of Ligand Pharmaceuticals Incorporated indicate a very strong financial position with consistently low levels of debt relative to assets, capital, and equity. The debt-to-assets, debt-to-capital, and debt-to-equity ratios remain at 0.00 over the years from 2020 to 2024, demonstrating that the company has no significant debt obligation in relation to its total assets, capital structure, and shareholders' equity.
Additionally, the financial leverage ratio has shown a decreasing trend from 1.92 in 2020 to 1.13 in 2024. This indicates that the company has been effectively reducing its financial leverage, which is a positive sign of improved solvency and financial stability. Overall, these solvency ratios suggest that Ligand Pharmaceuticals is in a strong position to meet its financial obligations and maintain a healthy balance sheet in the coming years.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.83 | 98.04 | 6.12 | 4.90 | 1.50 |
The interest coverage ratio of Ligand Pharmaceuticals Incorporated has shown fluctuations over the years, indicating varying levels of financial stability and ability to meet interest obligations.
As of December 31, 2020, the interest coverage ratio was 1.50, suggesting that the company's operating income was just sufficient to cover its interest expenses. However, by December 31, 2021, the ratio improved significantly to 4.90, indicating a stronger ability to cover interest payments.
The trend continued to strengthen in the following years, with the interest coverage ratios of 6.12 and 98.04 recorded as of December 31, 2022, and December 31, 2023, respectively. These high ratios signify a comfortable cushion between the company's operating income and its interest expenses, reflecting improved financial health and reduced risk of default.
However, the interest coverage ratio dipped to 1.83 as of December 31, 2024, signaling a potential strain on the company's ability to service its interest payments with its operating income. This decrease may warrant further investigation into the factors contributing to the decline and the company's overall financial position.
In conclusion, while Ligand Pharmaceuticals Incorporated has demonstrated varying levels of interest coverage over the years, it is essential for stakeholders to closely monitor this ratio to assess the company's financial health and sustainability.