Ligand Pharmaceuticals Incorporated (LGND)

Ligand Pharmaceuticals, Inc. has exhibited a consistent decrease in its solvency ratios over the past five years, indicating improved financial stability and lower reliance on debt financing. The debt-to-assets ratio has declined from 0.43 in 2019 to 0.00 in 2023, reflecting a significant reduction in the proportion of assets financed by debt. Similarly, the debt-to-capital and debt-to-equity ratios have also shown a decreasing trend, indicating lower debt obligations in relation to the company's capital structure and equity base.

Furthermore, the financial leverage ratio has decreased from 1.95 in 2019 to 1.12 in 2023, highlighting a reduction in financial risk and leverage within the company. This implies that Ligand Pharmaceuticals has become less reliant on debt to fund its operations over the years, which is a positive sign for investors and creditors concerned about the company's long-term solvency.

Overall, the solvency ratios of Ligand Pharmaceuticals, Inc. demonstrate an improving financial position and a strengthened balance sheet, suggesting increased financial stability and lower risk of insolvency. These trends indicate that the company has been effectively managing its debt levels and maintaining a sustainable capital structure.

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Coverage ratios

The interest coverage ratio for Ligand Pharmaceuticals, Inc. indicates the company's ability to meet its interest obligations with its operating income.

In 2021, the interest coverage ratio was 4.21, suggesting that the company's operating income was sufficient to cover its interest expenses around four times over. This indicates a strong ability to meet financial obligations and signals financial health.

In 2020, the interest coverage ratio was 0.45, indicating a decline in the company's ability to cover its interest expenses. The ratio falling below 1 suggests that the operating income was barely enough to cover the interest expenses, which raises concern about the company's financial stability.

Furthermore, in 2019, the interest coverage ratio was -0.39, indicating that the company's operating income was not sufficient to cover its interest expenses, leading to further financial challenges.

Overall, the trend in the interest coverage ratio for Ligand Pharmaceuticals, Inc. reflects fluctuations in the company's ability to cover its interest expenses with its operating income. It is essential for investors and stakeholders to monitor this ratio as it provides insights into the company's financial health and ability to manage debt obligations.