Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Align Technology Inc., long-term (investment) activity ratios
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).
The investment activity ratios demonstrate a general decline in asset utilization efficiency over the analyzed five-year period. A significant contraction in efficiency is observed across all metrics in 2020, followed by a partial recovery in 2021 and a subsequent softening in 2022.
- Fixed Asset Utilization
- Net fixed asset turnover showed initial stability, peaking at 3.81 in 2019 before experiencing volatility. By December 31, 2022, the ratio declined to 3.03, its lowest point in the period. When including operating lease right-of-use assets, a more pronounced and consistent downward trend is evident, falling from 3.77 in 2018 to 2.76 in 2022. This divergence suggests that the expansion of leased assets has outpaced the growth in revenue generated from those assets.
- Total Asset Efficiency
- Total asset turnover remained stable at 0.96 through 2019 but suffered a sharp decline to 0.51 in 2020. Although the ratio improved to 0.67 in 2021, it retreated to 0.63 by the end of 2022. This pattern indicates a substantial reduction in the company's ability to generate sales from its total asset base compared to the 2018-2019 baseline.
- Equity Productivity
- Equity turnover followed a trajectory similar to total asset turnover, reaching a high of 1.79 in 2019 before dropping precipitously to 0.76 in 2020. A moderate recovery occurred in 2021 (1.09), followed by a slight decline to 1.04 in 2022. The overall trend reflects a decrease in the efficiency with which shareholder equity is being leveraged to drive top-line growth.
In summary, the longitudinal trend indicates that while a partial rebound occurred after the 2020 downturn, the company has not returned to its pre-2020 levels of asset and equity efficiency. The steady decline in the right-of-use asset turnover ratio specifically highlights a growing gap between long-term lease commitments and corresponding revenue generation.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Net Fixed Asset Turnover
Align Technology Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net revenues | 3,734,635) | 3,952,584) | 2,471,941) | 2,406,796) | 1,966,492) | |
| Property, plant and equipment, net | 1,231,855) | 1,081,926) | 734,721) | 631,730) | 521,329) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 3.03 | 3.65 | 3.36 | 3.81 | 3.77 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | 4.76 | 4.81 | — | — | — | |
| Elevance Health Inc. | 36.07 | 34.94 | — | — | — | |
| Intuitive Surgical Inc. | 2.62 | 3.04 | — | — | — | |
| Medtronic PLC | 5.85 | 5.77 | — | — | — | |
| UnitedHealth Group Inc. | 31.81 | 31.81 | — | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 17.82 | 17.31 | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 7.88 | 7.74 | — | — | — | |
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).
1 2022 Calculation
Net fixed asset turnover = Net revenues ÷ Property, plant and equipment, net
= 3,734,635 ÷ 1,231,855 = 3.03
2 Click competitor name to see calculations.
The analysis of investment activity from 2018 to 2022 reveals a fluctuating pattern in the efficiency of fixed asset utilization. While net revenues experienced substantial growth over the majority of the five-year period, the expansion of the fixed asset base occurred at a rate that eventually outpaced revenue generation, leading to a decline in overall turnover efficiency.
- Revenue and Asset Expansion
- Net revenues grew from US$ 1,966,492 thousand in 2018 to a peak of US$ 3,952,584 thousand in 2021, before contracting to US$ 3,734,635 thousand in 2022. During the same period, net property, plant, and equipment increased consistently each year, rising from US$ 521,329 thousand in 2018 to US$ 1,231,855 thousand in 2022. This indicates a sustained capital investment strategy in long-term physical assets.
- Net Fixed Asset Turnover Trends
- The net fixed asset turnover ratio peaked in 2019 at 3.81, representing the highest level of efficiency in leveraging fixed assets to generate sales. This was followed by a decline to 3.36 in 2020. A temporary recovery was observed in 2021, with the ratio increasing to 3.65, coinciding with the period of maximum revenue growth.
- Recent Efficiency Contraction
- A notable decrease in efficiency occurred in 2022, with the net fixed asset turnover ratio falling to 3.03, the lowest point in the recorded period. This decline is the result of simultaneous revenue contraction and continued growth in net property, plant, and equipment. The divergence suggests that the most recent capital expenditures have not yet translated into proportional increases in revenue, resulting in lower asset productivity.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Align Technology Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net revenues | 3,734,635) | 3,952,584) | 2,471,941) | 2,406,796) | 1,966,492) | |
| Property, plant and equipment, net | 1,231,855) | 1,081,926) | 734,721) | 631,730) | 521,329) | |
| Operating lease right-of-use assets, net | 118,880) | 121,257) | 82,553) | 56,244) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 1,350,735) | 1,203,183) | 817,274) | 687,974) | 521,329) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 2.76 | 3.29 | 3.02 | 3.50 | 3.77 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Abbott Laboratories | 4.25 | 4.26 | — | — | — | |
| Elevance Health Inc. | 31.64 | 30.12 | — | — | — | |
| Intuitive Surgical Inc. | 2.53 | 2.93 | — | — | — | |
| Medtronic PLC | 5.06 | 4.84 | — | — | — | |
| UnitedHealth Group Inc. | 21.54 | 21.54 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Health Care Equipment & Services | 14.39 | 13.89 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 6.90 | 6.75 | — | — | — | |
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).
1 2022 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net revenues ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 3,734,635 ÷ 1,350,735 = 2.76
2 Click competitor name to see calculations.
An analysis of the long-term activity ratios reveals a general decline in the efficiency of fixed asset utilization over the five-year period from 2018 to 2022. While net revenues exhibited overall growth, the expansion of the property, plant, and equipment base—including right-of-use assets—occurred at a rate that consistently outpaced revenue gains, leading to a compression of the turnover ratio.
- Net Fixed Asset Turnover Trend
- The net fixed asset turnover ratio decreased from 3.77 in 2018 to 2.76 in 2022. This downward trajectory indicates a reduction in the amount of revenue generated per unit of net fixed assets. The ratio experienced a steady decline through 2020, a temporary recovery in 2021, and a subsequent drop to its lowest point in the analyzed period by the end of 2022.
- Fixed Asset Investment Growth
- A consistent and significant increase in the net property, plant, and equipment balance is observed, rising from US$ 521.3 million in 2018 to US$ 1.35 billion in 2022. The steady accumulation of these assets suggests a strategic commitment to increasing operational capacity and infrastructure, including the integration of operating lease right-of-use assets.
- Revenue Alignment and Asset Productivity
- The relationship between revenue growth and asset acquisition shows a disconnect in productivity. Although net revenues peaked in 2021 at US$ 3.95 billion, the turnover ratio only partially recovered to 3.29, failing to reach 2018 or 2019 levels. The decline to 2.76 in 2022 is particularly notable as it resulted from the combination of a slight decrease in net revenues (to US$ 3.73 billion) and a continued increase in the asset base, indicating that recent investments have not yet translated into proportional revenue increases.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Total Asset Turnover
Align Technology Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net revenues | 3,734,635) | 3,952,584) | 2,471,941) | 2,406,796) | 1,966,492) | |
| Total assets | 5,947,947) | 5,942,110) | 4,829,683) | 2,500,702) | 2,052,458) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.63 | 0.67 | 0.51 | 0.96 | 0.96 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | 0.59 | 0.57 | — | — | — | |
| Elevance Health Inc. | 1.51 | 1.41 | — | — | — | |
| Intuitive Surgical Inc. | 0.48 | 0.42 | — | — | — | |
| Medtronic PLC | 0.35 | 0.32 | — | — | — | |
| UnitedHealth Group Inc. | 1.31 | 1.34 | — | — | — | |
| Total Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 1.06 | 1.02 | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.66 | 0.62 | — | — | — | |
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).
1 2022 Calculation
Total asset turnover = Net revenues ÷ Total assets
= 3,734,635 ÷ 5,947,947 = 0.63
2 Click competitor name to see calculations.
The analysis of asset utilization from 2018 to 2022 reveals a significant shift in operational efficiency, characterized by an initial period of stability followed by a sharp decline and a subsequent partial recovery.
- Revenue Trends
- Net revenues exhibited a general upward trajectory for the majority of the period, increasing from 1.97 billion USD in 2018 to a peak of 3.95 billion USD in 2021. A slight contraction occurred in 2022, with revenues decreasing to 3.73 billion USD.
- Asset Base Expansion
- A substantial increase in total assets is observed, most notably between 2019 and 2020, where assets grew from 2.50 billion USD to 4.83 billion USD. This expansion continued through 2021 and remained nearly constant in 2022, concluding the period at 5.95 billion USD.
- Total Asset Turnover Performance
- The total asset turnover ratio remained steady at 0.96 during 2018 and 2019, indicating a consistent relationship between asset investment and revenue generation. A sharp decline to 0.51 occurred in 2020, driven by the rapid expansion of the asset base that far outpaced revenue growth during that fiscal year. Although the ratio recovered to 0.67 in 2021 due to a surge in net revenues, it dipped slightly to 0.63 in 2022. This overall trend suggests a decrease in the efficiency of asset utilization compared to the 2018-2019 baseline.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Equity Turnover
Align Technology Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net revenues | 3,734,635) | 3,952,584) | 2,471,941) | 2,406,796) | 1,966,492) | |
| Stockholders’ equity | 3,601,358) | 3,622,714) | 3,233,865) | 1,346,169) | 1,252,891) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 1.04 | 1.09 | 0.76 | 1.79 | 1.57 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Abbott Laboratories | 1.19 | 1.20 | — | — | — | |
| Elevance Health Inc. | 4.29 | 3.80 | — | — | — | |
| Intuitive Surgical Inc. | 0.56 | 0.48 | — | — | — | |
| Medtronic PLC | 0.60 | 0.59 | — | — | — | |
| UnitedHealth Group Inc. | 4.14 | 3.98 | — | — | — | |
| Equity Turnover, Sector | ||||||
| Health Care Equipment & Services | 2.61 | 2.42 | — | — | — | |
| Equity Turnover, Industry | ||||||
| Health Care | 1.69 | 1.67 | — | — | — | |
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).
1 2022 Calculation
Equity turnover = Net revenues ÷ Stockholders’ equity
= 3,734,635 ÷ 3,601,358 = 1.04
2 Click competitor name to see calculations.
The financial trajectory between 2018 and 2022 is characterized by significant growth in net revenues and a substantial expansion of the stockholders' equity base, which collectively influenced the equity turnover ratio.
- Revenue Growth Trends
- Net revenues exhibited a strong upward trend for the majority of the period, increasing from 1,966,492 thousand US dollars in 2018 to a peak of 3,952,584 thousand US dollars in 2021. A slight contraction occurred in 2022, with revenues declining to 3,734,635 thousand US dollars, indicating a period of stabilization following rapid growth.
- Stockholders' Equity Expansion
- The equity base remained relatively stable between 2018 and 2019 but experienced a sharp increase in 2020, jumping from 1,346,169 thousand US dollars to 3,233,865 thousand US dollars. This expansion continued into 2021, reaching 3,622,714 thousand US dollars, before remaining nearly flat in 2022.
- Equity Turnover Analysis
- Equity turnover demonstrated significant volatility. The ratio improved from 1.57 in 2018 to a peak of 1.79 in 2019, suggesting high asset utilization efficiency relative to equity. However, a substantial decline to 0.76 was observed in 2020, directly correlating with the disproportionate increase in stockholders' equity compared to revenue growth during that year. A partial recovery followed in 2021, with the ratio rising to 1.09, and ending the period at 1.04 in 2022.
- Operational Efficiency Insights
- The fluctuations in the equity turnover ratio indicate that the company's ability to generate revenue from its equity base was temporarily diminished by a massive capitalization event or retained earnings surge in 2020. While the ratio has not returned to the levels seen in 2018 and 2019, the stabilization around 1.04 suggests a new baseline of efficiency in utilizing the expanded equity base to drive sales.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?