Align Technology Inc (ALGN)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	1,043,890	937,438	942,050	1,099,370	960,843
Short-term investments	US$ in thousands	0	35,304	57,534	71,972	0
Total current liabilities	US$ in thousands	2,038,030	2,066,610	1,925,890	1,924,070	1,325,600
Cash ratio		0.51	0.47	0.52	0.61	0.72

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,043,890K + $0K) ÷ $2,038,030K
= 0.51

The cash ratio of Align Technology Inc has exhibited a declining trend over the years, starting at 0.72 on December 31, 2020, and decreasing to 0.61 by December 31, 2021, 0.52 by December 31, 2022, 0.47 by December 31, 2023, and slightly increasing to 0.51 by December 31, 2024.

A cash ratio below 1 indicates that the company may not have enough liquid assets to cover its current liabilities. The decreasing trend in the cash ratio could be a cause for concern as it suggests a potential deterioration in Align Technology Inc's ability to meet its short-term obligations solely with its readily available cash and equivalents.

It is essential for the company to closely monitor its cash position and explore strategies to improve liquidity to ensure it can meet its financial obligations and manage any unexpected cash needs effectively in the future.