Cash Flow Statement
The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.
The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.
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- Income Statement
- Statement of Comprehensive Income
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Net Profit Margin since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
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Align Technology Inc., consolidated cash flow statement
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Net Income
- Net income displayed significant volatility, with a substantial increase from 2018 (approximately $400 million) to 2020 (about $1.78 billion), followed by a sharp decline in 2021 and 2022 to $772 million and $362 million respectively.
- Deferred Taxes
- Deferred taxes fluctuated notably with negative values in 2018, 2020, and 2022, and small positive values in 2019 and 2021. A large negative deferred tax value in 2020 indicates a non-recurring tax adjustment during that period.
- Depreciation and Amortization
- Depreciation and amortization steadily increased year-over-year from approximately $55 million in 2018 to $126 million in 2022, indicating growing investment in capital assets.
- Stock-Based Compensation
- This expense consistently grew over the five years, increasing from about $71 million in 2018 to approximately $133 million in 2022, showing an increasing emphasis on equity incentives for employees.
- Non-Cash Operating Lease Cost
- Starting from 2019, non-cash operating lease costs rose each year, from $18 million to over $30 million by 2022, reflecting possibly increased leasing obligations or changes in accounting treatment under lease standards.
- Miscellaneous Operating Items
- Certain unusual items appeared sporadically: an arbitration award loss was recorded in 2021 (around $43 million), impairments on long-lived assets in 2019, and various gains and losses related to equity investments and lease terminations predominantly in earlier years.
- Working Capital Components
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Accounts receivable and inventories both showed notable negative changes in 2021, indicating a substantial use of cash or increase in balances, particularly notable with the $262 million negative change in receivables and $112 million in inventories.
Accounts payable and accrued liabilities showed volatility, with accounts payable swings from a positive $25 million in 2018 to a negative $37 million in 2022; accrued liabilities peaked positively in 2021 but were negative in 2022, suggesting changing payment cycles or obligations.
- Deferred Revenues
- Deferred revenues rose steadily, nearly doubling from $136 million in 2018 to $241 million in 2022, peaking in 2021 at $463 million. This suggests growth in prepayments from customers or long-term contracts.
- Net Cash from Operating Activities
- Operating cash flows were robust overall, with marked growth in 2019 and 2021 when cash provided exceeded $700 million and $1.17 billion respectively. However, 2022 recorded a notable decline to around $569 million.
- Investing Activities
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Investing cash flow was predominantly negative, with large purchases of property, plant, and equipment especially evident in 2021 ($401 million) and 2022 ($292 million), reflecting continued capital expenditures.
Investments and acquisitions varied but included significant acquisition expenses in 2020 ($421 million) and relatively smaller amounts thereafter.
Marketable securities activities showed mixed behavior between purchases and proceeds from sales and maturities, indicating active portfolio management.
- Financing Activities
- Financing cash outflows were significant, primarily driven by large stock repurchases: $300 million in 2018, increasing to $435 million in 2022. Issuance of common stock was modest in comparison, steadily increasing slightly over time. Additional payments related to equity forward contracts and payroll taxes among equity awards contributed to cash outflows.
- Cash and Cash Equivalents
- Ending cash balances increased from 2018 through 2021, peaking at about $1.1 billion, but decreased by roughly $158 million in 2022, driven by lower operating cash inflows and ongoing investing and financing outflows.
- Overall Financial Trends
- The company exhibited a pattern of strong operating cash flow generation, albeit with fluctuations in net income that affected overall profitability. Capital investment remained a priority, as evidenced by sustained property and equipment purchases. Financing activities indicated aggressive capital return strategies, particularly via share repurchases. The volatility in working capital accounts and unusual tax and impairment items suggest episodic operational adjustments or external events impacting certain periods. Cash position remains strong despite the variations observed.