Align Technology Inc (ALGN)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	445,053	361,573	772,020	1,775,890	442,776
Total stockholders’ equity	US$ in thousands	3,630,490	3,601,360	3,622,710	3,233,860	1,346,170
ROE		12.26%	10.04%	21.31%	54.92%	32.89%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $445,053K ÷ $3,630,490K
= 12.26%

Align Technology, Inc.'s return on equity (ROE) has fluctuated over the past five years. In 2019, the ROE was at its highest level at 32.89%, indicating that the company generated a strong return for its shareholders relative to its equity. However, the ROE decreased significantly in 2020 to 54.92%, reflecting a decrease in profitability or higher equity base. In 2021, there was a further decline in ROE to 21.31%, indicating that the company's ability to generate profit from its equity had weakened.

However, in 2022, there was a slight improvement in ROE to 10.04%, which suggests that the company took steps to enhance its profitability or manage its equity more efficiently. This positive trend continued in 2023, with ROE increasing to 12.26%. It indicates that Align Technology, Inc. has been able to improve its profitability relative to its equity base compared to the previous year.

Overall, the fluctuation in ROE over the past five years can be attributed to changes in profitability, equity base, and efficiency in managing equity. It is important for investors and stakeholders to closely monitor the company's ROE to assess its ability to generate returns on shareholder's equity effectively.