Align Technology Inc (ALGN)

Payables turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	1,155,397	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	662,899	635,994	599,715	555,984
Payables	US$ in thousands	113,125	99,693	110,155	130,561	127,870	138,918	145,607	186,509	163,886	174,916	225,079	124,298	142,132	119,184	94,987	72,690	87,250	63,300	61,950	62,512
Payables turnover		10.21	11.56	10.22	8.57	8.61	7.94	7.51	5.70	6.21	5.46	3.97	6.19	4.99	5.56	6.66	9.25	7.60	10.05	9.68	8.89

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,155,397K ÷ $113,125K
= 10.21

Align Technology, Inc.'s payables turnover ratio measures how efficiently the company is managing its accounts payable by assessing how many times during a period the company pays off its suppliers. A higher ratio indicates that the company is paying its suppliers more frequently.

Looking at the data provided, we can see fluctuations in Align Technology's payables turnover ratio over the past eight quarters. In Q4 2023, the company's payables turnover ratio was 10.21, indicating an improvement in its ability to pay off suppliers compared to the previous quarter at 11.56. This suggests that Align Technology has increased its efficiency in managing its accounts payable in Q4 2023.

Comparing the latest ratio to the same quarter in the previous year, Q4 2022, where the ratio was 8.61, we can see a significant improvement over the year in managing payables efficiently. The trend in the payables turnover ratio indicates that Align Technology has been progressively enhancing its ability to settle its payables promptly over the quarters.

The company's increasing payables turnover ratio could suggest several things, including negotiating better payment terms with suppliers, better inventory management, or improved cash flow management. It is essential to continue monitoring this ratio in the future quarters to assess whether Align Technology's efficiency in managing its accounts payable is being sustained or needs further attention.