Align Technology Inc (ALGN)

Inventory turnover

		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
Cost of revenue (ttm)	US$ in thousands	1,188,894	1,174,372	1,175,412	1,163,624	1,151,951	1,152,009	1,126,050	1,119,480	1,100,860	1,103,582	1,093,153	1,063,429	1,017,229	954,750	894,056	769,772	708,706	662,478	632,209	672,631
Inventory	US$ in thousands	254,287	254,119	259,492	280,076	296,902	296,189	312,736	311,885	338,752	320,903	310,046	275,669	230,230	207,116	178,751	150,643	139,237	123,093	131,276	120,977
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

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,188,894K ÷ $254,287K
= 4.68

The inventory turnover ratio for Align Technology Inc has displayed fluctuating trends over the period from March 31, 2020, to December 31, 2024. The inventory turnover ratio indicates how efficiently a company manages its inventory by selling and replacing it over a specific period.

From March 31, 2020, to March 31, 2022, the inventory turnover ratio decreased gradually from 5.56 to 3.86. This decline suggests that the company may have been experiencing challenges in selling its inventory efficiently or could have been holding excess inventory.

Subsequently, from March 31, 2022, to December 31, 2024, the inventory turnover ratio has shown some improvement, fluctuating between 3.25 and 4.68. This increase indicates that the company may have taken steps to manage its inventory more effectively, resulting in a higher turnover rate.

Overall, the trend in the inventory turnover ratio for Align Technology Inc highlights the importance of monitoring and managing inventory levels to ensure operational efficiency and optimize financial performance. A higher inventory turnover ratio generally indicates better inventory management and liquidity, while a lower ratio may suggest inefficiencies in the company’s operations that could impact profitability.