Align Technology Inc (ALGN)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		3.89	3.25	4.42	5.09	5.92
DOH	days	93.79	112.32	82.61	71.71	61.70

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.89
= 93.79

To analyze Align Technology, Inc.'s days of inventory on hand (DOH) over the past five years, we observe an increasing trend from 61.70 days in 2019 to 93.79 days in 2023. This indicates that the company is holding inventory for a longer period, which could tie up cash and lead to potential obsolescence risks.

The fluctuation in DOH can be seen in 2020 when it decreased to 71.71 days before rising again in 2021 to 82.61 days. This erratic movement suggests potential inventory management challenges or changes in the company's operations or sales patterns during those years.

The significant increase in DOH from 2021 to 2022 to 112.32 days followed by a slight decrease in 2023 may be a signal of improved inventory management practices or adjustments in response to market conditions. However, maintaining DOH above historical levels could potentially impact the company's liquidity and working capital efficiency.

Overall, Align Technology, Inc. should continue monitoring and optimizing its inventory management processes to strike a balance between ensuring product availability and minimizing excess inventory levels to enhance operational efficiency and financial performance.