Align Technology Inc (ALGN)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,155,400 | 1,100,860 | 1,017,230 | 708,706 | 662,899 |
| Payables | US$ in thousands | 113,125 | 127,870 | 163,886 | 142,132 | 87,250 |
| Payables turnover | 10.21 | 8.61 | 6.21 | 4.99 | 7.60 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,155,400K ÷ $113,125K
= 10.21
The payables turnover ratio for Align Technology, Inc. has shown an increasing trend over the past five years. The company's ability to manage its trade payables efficiently has improved significantly. In particular, the payables turnover ratio increased from 7.60 in 2019 to 10.21 in 2023, indicating that Align Technology has been able to pay off its suppliers at a quicker rate in recent years.
A higher payables turnover ratio suggests that the company is taking less time to pay its suppliers, which can be a positive signal of strong liquidity and effective management of working capital. This could indicate that Align Technology has negotiated better payment terms with its suppliers or has streamlined its processes for managing payables.
Overall, the increasing trend in the payables turnover ratio for Align Technology, Inc. reflects positively on the company's financial health and operational efficiency in managing its trade payables over the five-year period.
Peer comparison
Dec 31, 2023