Align Technology Inc (ALGN)

Working capital 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
Revenue (ttm)	US$ in thousands	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	2,406,796	2,291,029	2,188,977	2,078,539
Total current assets	US$ in thousands	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	1,633,420	1,505,580	1,457,370	1,439,110
Total current liabilities	US$ in thousands	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	970,970	870,144	789,046	804,884
Working capital turnover		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	3.63	3.61	3.28	3.28

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $3,862,257K ÷ ($2,446,620K – $2,066,610K)
= 10.16

Align Technology Inc.'s working capital turnover has shown variability over the past eight quarters. The working capital turnover ratio indicates how efficiently the company is using its working capital to generate revenue. A higher working capital turnover ratio suggests that the company is effectively managing its working capital to generate sales.

In Q4 2023, the working capital turnover ratio was 10.16, signifying that Align Technology Inc. was able to convert its working capital into sales approximately 10.16 times during the quarter. This is a significant improvement compared to the previous quarter, Q3 2023, where the ratio was 6.58.

Looking back over the last year, the working capital turnover ratio has generally shown an increasing trend, with occasional fluctuations. The highest ratio was recorded in Q1 2023 at 11.32, indicating that Align Technology Inc. was exceptionally efficient in utilizing its working capital to drive revenue during that quarter.

Overall, the upward trend in the working capital turnover ratio suggests that Align Technology Inc. has been improving its efficiency in utilizing its working capital to generate sales over the past year. This could be a positive indicator of the company's operational effectiveness and financial management. However, it is important to consider other factors in conjunction with this ratio to gain a comprehensive understanding of the company's financial performance.