Align Technology Inc (ALGN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 70.08% | 70.52% | 74.26% | 71.33% | 72.46% |
| Operating profit margin | 16.66% | 17.21% | 24.70% | 15.66% | 22.54% |
| Pretax margin | 16.60% | 16.04% | 25.61% | 15.33% | 23.06% |
| Net profit margin | 11.52% | 9.68% | 19.53% | 71.84% | 18.40% |
Align Technology, Inc.'s profitability ratios show varying trends over the past five years. The gross profit margin has remained relatively stable, hovering around 70% to 74%, indicating consistent efficiency in generating profits after accounting for the cost of goods sold.
The operating profit margin experienced fluctuations, with a peak in 2021 at 24.70% but slightly declining in subsequent years. This indicates the company's ability to generate profits from its core operations has been impacted by factors such as operating expenses or revenue fluctuations.
The pretax margin also displayed fluctuations, with a significant peak in 2021 at 25.61%, followed by a decline to 16.60% in 2023. This suggests that while the company was successful in generating profits before taxes in certain years, it faced challenges in maintaining this level of profitability consistently.
The net profit margin exhibited significant volatility, notably a sharp increase in 2020 to 71.84%, likely due to one-time events or accounting adjustments. The subsequent decline in 2021 and 2023 indicates a return to more normalized levels of profitability, albeit with some variability over the years.
Overall, while Align Technology, Inc. has demonstrated strong gross profit margins and periods of high profitability, the fluctuations in operating, pretax, and net profit margins highlight the importance of monitoring factors impacting the company's profitability over time.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.57% | 10.80% | 16.43% | 8.02% | 21.69% |
| Return on assets (ROA) | 7.32% | 6.08% | 12.99% | 36.77% | 17.71% |
| Return on total capital | 17.72% | 17.84% | 26.95% | 11.97% | 40.30% |
| Return on equity (ROE) | 12.26% | 10.04% | 21.31% | 54.92% | 32.89% |
Profitability ratios provide insights into a company's ability to generate profits relative to its assets and capital structure.
1. Operating return on assets (Operating ROA):
- The Operating ROA has shown a slight decline over the past five years, from 20.57% in 2019 to 10.79% in 2023. This ratio indicates the efficiency of Align Technology in utilizing its assets to generate operating profits.
2. Return on assets (ROA):
- The ROA has fluctuated over the years, with a significant decrease from 36.77% in 2020 to 7.32% in 2023. This ratio reflects Align Technology's overall profitability in relation to its total assets.
3. Return on total capital:
- The Return on total capital has also shown variability, with a notable drop from 37.66% in 2019 to 18.09% in 2023. This ratio assesses the company's ability to generate returns on both debt and equity capital invested.
4. Return on equity (ROE):
- The ROE has demonstrated fluctuations, with a substantial decrease from 54.92% in 2020 to 12.26% in 2023. This ratio measures Align Technology's profitability from the perspective of shareholders' equity.
Overall, Align Technology's profitability ratios have shown mixed performance over the years, reflecting changes in operational efficiency, asset utilization, and capital structure. Further analysis into the company's financial strategies and market conditions could help clarify the drivers behind these fluctuations.