Align Technology Inc (ALGN)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,199,850 | 1,155,400 | 1,100,860 | 1,017,230 | 708,706 |
| Inventory | US$ in thousands | 254,287 | 296,902 | 338,752 | 230,230 | 139,237 |
| Inventory turnover | 4.72 | 3.89 | 3.25 | 4.42 | 5.09 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,199,850K ÷ $254,287K
= 4.72
The inventory turnover of Align Technology Inc has displayed a decreasing trend over the five-year period from December 31, 2020, to December 31, 2024. The turnover ratio declined from 5.09 in 2020 to 4.42 in 2021, further decreasing to 3.25 in 2022. However, there was a slight improvement in 2023 when the turnover ratio increased to 3.89, and a more significant improvement was observed in 2024, with the ratio reaching 4.72.
A high inventory turnover ratio indicates that the company is efficiently managing its inventory levels, selling products quickly, and minimizing storage costs. Conversely, a declining inventory turnover ratio may suggest potential issues such as overstocking, slowing sales, or obsolete inventory.
In this case, Align Technology Inc's inventory turnover has fluctuated over the years, indicating potential changes in the company's inventory management practices and sales performance. Further analysis of the underlying reasons behind these fluctuations and comparison with industry benchmarks could provide valuable insights into the company's operational efficiency and financial health.
Peer comparison
Dec 31, 2024