Align Technology Inc (ALGN)

Activity ratios

Short-term

Turnover ratios

	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
Receivables turnover	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Payables turnover	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Working capital turnover	8.80	7.42	10.59	8.58	10.16	6.58	10.43	11.32	7.49	5.59	6.97	6.53	6.93	5.65	6.49	3.90	4.72	6.51	10.40	3.62

The analysis of Align Technology Inc's activity ratios reveals significant insights into the company's operational efficiency over the reporting periods.

1. Inventory Turnover: The inventory turnover ratio measures how effectively the company manages its inventory. The trend shows a gradual decline in inventory turnover from 5.56 in March 2020 to 4.68 in December 2024. This indicates that the company is holding onto its inventory for a longer period, which may lead to increased carrying costs and potential obsolescence risks.

2. Receivables Turnover: The data provided does not include receivables turnover ratios, which measure how efficiently the company collects its accounts receivable. Without this information, it is challenging to evaluate how quickly Align Technology is converting its credit sales into cash.

3. Payables Turnover: Similarly, there is an absence of information on payables turnover ratios, which assess how efficiently the company pays its suppliers. Without this data, it is difficult to determine the company's payment practices and liquidity management related to trade payables.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently the company utilizes its working capital to generate sales. The trend in Align Technology's working capital turnover suggests variability, with peaks and troughs observed across different reporting periods. The ratio ranged from 3.62 in March 2020 to 11.32 in March 2023. A higher turnover ratio indicates that the company is effectively using its working capital to generate revenue.

In conclusion, while the analysis of activity ratios provides valuable insights into Align Technology Inc's operational performance, the absence of data on receivables and payables turnover limits a comprehensive evaluation of the company's overall efficiency in managing its working capital and operating cycle. Further analysis incorporating these missing ratios would provide a more complete picture of the company's liquidity and operational effectiveness.

Average number of days

		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
Days of inventory on hand (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
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

Based on the data provided for Align Technology Inc, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- The Days of Inventory on Hand measure how many days a company takes to sell its average inventory.
- The trend shows an increase in DOH from 65.65 days on March 31, 2020, to 78.07 days on December 31, 2024, with some fluctuations.
- A rising DOH may indicate slower inventory turnover, which can tie up cash and increase storage costs.

2. Days of Sales Outstanding (DSO):
- The DSO ratio was not provided, which may suggest that the company does not disclose this metric or has very low credit sales.
- Typically, a lower DSO indicates faster collection of receivables, improving cash flow and liquidity.

3. Number of Days of Payables:
- The data for the Number of Days of Payables was not provided, indicating a lack of information on how many days the company takes to pay its suppliers.
- A higher number of days of payables may indicate better cash flow management by delaying payments, although it could strain supplier relationships.

In conclusion, while the trend in Days of Inventory on Hand shows an increase over the period, the lack of data on Days of Sales Outstanding and Number of Days of Payables limits a comprehensive analysis of Align Technology Inc's activity ratios.

Long-term

	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
Fixed asset turnover	—	—	—	—	—	2.74	2.92	2.93	2.76	2.94	3.07	3.18	3.29	3.43	3.30	3.69	3.36	3.25	3.23	3.63
Total asset turnover	0.64	0.62	0.64	0.64	0.63	0.60	0.61	0.63	0.63	0.65	0.69	0.68	0.67	0.66	0.64	0.56	0.51	0.52	0.54	0.61

Align Technology Inc's fixed asset turnover ratio has shown a declining trend over the years, starting at 3.63 in March 2020 and decreasing to 2.74 by September 30, 2023. This indicates that the company is generating less revenue from its fixed assets over time.

On the other hand, the total asset turnover ratio has fluctuated, with a general uptrend from 0.51 in December 2020 to 0.64 in June 30, 2024. This ratio signifies the company's ability to generate sales relative to its total assets, showing an improvement in asset utilization efficiency.

Overall, while the fixed asset turnover ratio has been declining, the total asset turnover ratio has been showing a more positive trend, indicating that Align Technology Inc has been more efficient in utilizing its total assets to generate sales.