Ligand Pharmaceuticals Incorporated (LGND)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	787,216	762,668	1,297,590	1,362,280	1,494,920
Total stockholders’ equity	US$ in thousands	700,913	597,485	821,159	709,525	767,232
Financial leverage ratio		1.12	1.28	1.58	1.92	1.95

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $787,216K ÷ $700,913K
= 1.12

The financial leverage ratio of Ligand Pharmaceuticals, Inc. has shown a decreasing trend over the past five years, declining from 1.95 in 2019 to 1.12 in 2023. A lower financial leverage ratio indicates that the company is relying less on debt to finance its operations and investments compared to its equity.

This decreasing trend implies that Ligand Pharmaceuticals has been reducing its financial risk by decreasing its reliance on debt financing. A lower financial leverage ratio generally indicates a stronger financial position and lower risk of default, as the company has more equity relative to debt in its capital structure.

It is important to note that a financial leverage ratio of 1.12 in 2023 is relatively low, suggesting that Ligand Pharmaceuticals has a conservative capital structure with a higher proportion of equity compared to debt. This could be seen as a positive sign, as it indicates a lower level of financial risk and potential for more stability in the company's financial position.