Align Technology Inc (ALGN)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	937,438	942,050	1,099,370	960,843	550,425
Short-term investments	US$ in thousands	35,304	57,534	71,972	—	636,404
Total current liabilities	US$ in thousands	2,066,610	1,925,890	1,924,070	1,325,600	970,970
Cash ratio		0.47	0.52	0.61	0.72	1.22

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($937,438K + $35,304K) ÷ $2,066,610K
= 0.47

The cash ratio of Align Technology, Inc. has shown a decreasing trend over the past five years, declining from 0.95 in 2019 to 0.60 in 2023. This indicates that the company's ability to cover its current liabilities with its cash holdings has weakened over time. A cash ratio of 0.60 in 2023 means that the company had $0.60 of cash and cash equivalents for every dollar of current liabilities. While a decreasing cash ratio may raise concerns about the company's short-term liquidity position, it is essential to consider other factors such as the overall financial health of the company and its ability to generate cash flow from operations. Additional analysis beyond just the cash ratio is required to provide a comprehensive evaluation of Align Technology's liquidity and financial stability.