Align Technology Inc (ALGN)

Working capital 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
Revenue (ttm)	US$ in thousands	3,999,012	3,960,519	3,942,861	3,916,541	3,862,257	3,807,046	3,737,180	3,704,563	3,734,635	3,864,220	3,989,782	4,031,039	3,952,591	3,756,011	3,474,245	2,815,749	2,471,941	2,287,208	2,160,405	2,408,788
Total current assets	US$ in thousands	2,492,440	2,597,390	2,412,370	2,479,310	2,446,620	2,701,800	2,465,460	2,331,880	2,424,390	2,500,580	2,376,800	2,480,770	2,494,080	2,455,310	2,231,820	2,115,560	1,849,540	1,473,250	1,149,240	1,576,520
Total current liabilities	US$ in thousands	2,038,030	2,063,610	2,040,120	2,023,040	2,066,610	2,122,990	2,107,060	2,004,600	1,925,890	1,809,400	1,804,410	1,863,650	1,924,070	1,790,320	1,696,580	1,393,840	1,325,600	1,121,790	941,592	910,686
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

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $3,999,012K ÷ ($2,492,440K – $2,038,030K)
= 8.80

The working capital turnover ratio for Align Technology Inc has fluctuated over the past few years. The ratio measures how efficiently the company is utilizing its working capital to generate sales revenue. A higher working capital turnover ratio generally indicates that the company is effectively managing its working capital.

Looking at the data provided:
- The working capital turnover ratio showed a significant increase from June 2020 to September 2020, indicating a sharp improvement in the company's working capital efficiency.
- The ratio peaked in March 2023 at 11.32, suggesting that Align Technology Inc was able to generate sales revenue more than 11 times the amount of its working capital during that period.
- Following the peak, there was some fluctuation in the ratio, but overall, it remained at relatively high levels, indicating good working capital management.
- The ratio saw a slight decrease towards the end of 2024 compared to the peak in March 2023, but it still remained at a healthy level of around 8.80 by December 31, 2024.

In conclusion, based on the working capital turnover data provided, Align Technology Inc has demonstrated efficient utilization of its working capital in generating sales revenue over the analyzed period, with occasional fluctuations but overall maintaining a healthy level of efficiency.