Align Technology Inc (ALGN)
Cash conversion cycle
| 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 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.07 + — – —
= 78.07
The cash conversion cycle of Align Technology Inc has shown fluctuations over the periods analyzed.
Initially, the company's cash conversion cycle was around 65-75 days, indicating that it took approximately 2-3 months to convert its investments in inventory and other resources into cash inflows from sales.
However, starting from the second quarter of 2022, the cash conversion cycle began to increase significantly, reaching a peak of 112.32 days by the end of December 2022. This suggests that the company was taking longer to convert its investments into cash during this period.
Subsequently, there was a decrease in the cash conversion cycle, with the cycle ranging between 78-94 days from March 2023 to September 2024. This decrease indicates that the company was able to improve its efficiency in managing its working capital and converting its assets into cash.
Overall, a longer cash conversion cycle may indicate potential inefficiencies in inventory management, collection of receivables, or payment of payables. On the other hand, a shorter cash conversion cycle signifies improved operational efficiency and quicker conversion of investments into cash inflows.
Peer comparison
Dec 31, 2024