Align Technology Inc (ALGN)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover		4.68	4.62	4.53	4.15	3.88	3.89	3.60	3.59	3.25	3.44	3.53	3.86	4.42	4.61	5.00	5.11	5.09	5.38	4.82	5.56
DOH	days	78.07	78.98	80.58	87.85	94.07	93.84	101.37	101.69	112.32	106.14	103.52	94.62	82.61	79.18	72.98	71.43	71.71	67.82	75.79	65.65

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.68
= 78.07

Days of Inventory on Hand (DOH) is a financial metric that measures how many days, on average, a company holds onto its inventory before selling it. It is calculated by dividing the average inventory balance by the cost of goods sold and then multiplying by the number of days in the period.

Analyzing the trend of Align Technology Inc's DOH over the period from March 31, 2020, to December 31, 2024, we observe a fluctuating pattern. Initially, the DOH was around 65-75 days, indicating that the company held its inventory for approximately 2 to 3 months before selling it.

However, the DOH started to increase from September 30, 2021, reaching a peak of 112.32 days on December 31, 2022. This significant increase suggests that Align Technology Inc was holding onto its inventory for a longer period, which may indicate inefficiencies in inventory management or a slowdown in sales.

Subsequently, the DOH decreased gradually, dropping to 78.07 days by December 31, 2024. This reduction could indicate improvements in inventory management practices, such as optimizing supply chain processes, reducing excess inventory levels, or increasing sales efficiency.

Overall, monitoring changes in the DOH can provide insights into a company's inventory management efficiency, operational performance, and potential impact on cash flow. For Align Technology Inc, it is essential to continue evaluating and adjusting its inventory management strategies to ensure optimal performance and profitability.