Align Technology Inc (ALGN)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 6,214,600 | 6,083,880 | 5,947,950 | 5,942,110 | 4,829,680 |
| Total stockholders’ equity | US$ in thousands | 3,851,980 | 3,630,490 | 3,601,360 | 3,622,710 | 3,233,860 |
| Financial leverage ratio | 1.61 | 1.68 | 1.65 | 1.64 | 1.49 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,214,600K ÷ $3,851,980K
= 1.61
The financial leverage ratio of Align Technology Inc has been showing a slight upward trend over the past five years. It increased from 1.49 at the end of December 31, 2020, to 1.61 by December 31, 2024, with fluctuations in between.
This indicates that the company is utilizing more debt relative to its equity over time. While an increasing financial leverage ratio can enhance returns on equity when profitability is high, it also raises the risks associated with debt repayment and interest expenses.
Align Technology Inc may be opting to leverage debt as a strategic financing tool to support growth initiatives or capitalize on investment opportunities. However, stakeholders should monitor the trend closely to ensure that the company maintains a healthy balance between debt and equity in its capital structure.
Peer comparison
Dec 31, 2024