Align Technology Inc (ALGN)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		4.72	3.89	3.25	4.42	5.09
DOH	days	77.36	93.79	112.32	82.61	71.71

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.72
= 77.36

The days of inventory on hand (DOH) for Align Technology Inc has shown variability over the years. In 2020, the DOH was reported at 71.71 days, indicating that, on average, the company held inventory for about 71.71 days before selling it.

However, there was an increase in DOH in subsequent years. By December 31, 2021, the DOH had increased to 82.61 days, suggesting that the company was holding inventory for a longer period before it was converted into sales.

The trend continued in 2022, with a significant increase in DOH to 112.32 days. This could imply potential challenges in managing inventory efficiently or adjusting production levels to meet demand effectively.

Although there was a slight decrease in DOH by December 31, 2023, to 93.79 days, the level remained elevated compared to the initial year.

By December 31, 2024, Align Technology Inc managed to reduce its DOH to 77.36 days, indicating a more efficient management of inventory compared to the preceding year.

Overall, the fluctuating trend in DOH implies the need for the company to closely monitor its inventory levels, production processes, and demand forecasting to optimize inventory management and potentially improve cash flow and profitability.