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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited a slight fluctuation over the analyzed period. It started at 3.77 in 2018, increased marginally to 3.81 in 2019, then declined to 3.36 in 2020. The ratio partially recovered to 3.65 in 2021 before decreasing again to 3.03 in 2022. This indicates varying efficiency in utilizing fixed assets to generate sales, with a general downward trend after 2019.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- When incorporating operating leases and right-of-use assets, the turnover ratio followed a similar but more pronounced downward trend. Starting at 3.77 in 2018, the ratio declined steadily each year to 3.50 in 2019, 3.02 in 2020, 3.29 in 2021, and 2.76 in 2022. This suggests that the inclusion of leased assets reveals a lower asset utilization efficiency over time, particularly after 2018.
- Total Asset Turnover
- Total asset turnover maintained stability at 0.96 in 2018 and 2019 but experienced a significant drop to 0.51 in 2020. A partial recovery occurred in 2021 with an increase to 0.67, followed by a slight decline to 0.63 in 2022. The sharp decline in 2020 may signal reduced overall efficiency in using total assets to generate revenue, possibly influenced by external factors affecting operational performance that year.
- Equity Turnover
- Equity turnover showed variability across the five-year period. Beginning at 1.57 in 2018, the ratio increased to 1.79 in 2019, indicating greater turnover of shareholder equity. This was followed by a pronounced decline to 0.76 in 2020, a rebound to 1.09 in 2021, and a slight decrease to 1.04 in 2022. The fluctuation pattern suggests changes in how effectively equity is employed to generate revenue, with a notable dip in 2020 and partial recovery afterward.
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 | 3.83 | — | — | |
| Elevance Health Inc. | 36.07 | 34.94 | 34.69 | — | — | |
| Intuitive Surgical Inc. | 2.62 | 3.04 | 2.76 | — | — | |
| Medtronic PLC | 5.85 | 5.77 | 5.99 | — | — | |
| UnitedHealth Group Inc. | 31.81 | 31.81 | 29.64 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 17.82 | 17.31 | 16.13 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 7.88 | 7.74 | 7.00 | — | — | |
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 the annual financial data over the five-year period reveals several noteworthy trends and changes in key financial indicators.
- Net Revenues
- Net revenues demonstrated a general upward trend from 2018 through 2021, increasing from approximately $1.97 billion in 2018 to nearly $3.95 billion in 2021. However, there was a decline in 2022 to about $3.73 billion, indicating a reduction after the peak in the previous year. This decline may suggest challenges in revenue generation or market conditions affecting sales.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment showed consistent growth throughout the observed period. Starting at approximately $521 million in 2018, the figure increased each year, reaching about $1.23 billion by the end of 2022. This steady increase indicates ongoing investment in fixed assets, which could support operational capacity expansion or upgrades.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, reflecting the efficiency of using fixed assets to generate revenue, showed some fluctuations. In 2018, the ratio was 3.77, slightly increasing to 3.81 in 2019, then declining to 3.36 in 2020. It improved again to 3.65 in 2021 before falling to 3.03 in 2022. The overall trend suggests a decrease in the efficiency of fixed asset utilization, particularly notable in the most recent year, which could be related to the increased asset base not translating proportionally into higher revenues.
In summary, while the company expanded its asset base significantly during this period, revenue growth peaked in 2021 and subsequently declined. The efficiency of fixed asset usage also decreased toward the end of the period, highlighting potential areas for operational improvement or shifts in market dynamics that may impact revenue generation relative to asset investment.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Align Technology Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | 3.42 | — | — | |
| Elevance Health Inc. | 31.64 | 30.12 | 29.26 | — | — | |
| Intuitive Surgical Inc. | 2.53 | 2.93 | 2.66 | — | — | |
| Medtronic PLC | 5.06 | 4.84 | 5.02 | — | — | |
| UnitedHealth Group Inc. | 21.54 | 21.54 | 19.55 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Health Care Equipment & Services | 14.39 | 13.89 | 12.79 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 6.90 | 6.75 | 6.14 | — | — | |
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.
- Net Revenues
- The net revenues showed a consistent upward trend from 2018 to 2021, increasing from approximately $1.97 billion to around $3.95 billion. However, in 2022, there was a decline to approximately $3.73 billion, indicating a reduction after several years of growth.
- Property, Plant and Equipment, Net
- The value of property, plant, and equipment, including operating lease right-of-use assets, increased steadily each year. It rose from about $521 million in 2018 to roughly $1.35 billion in 2022, reflecting ongoing investments or capital expenditures over the period.
- Net Fixed Asset Turnover
- This ratio, which measures the efficiency of fixed asset use in generating revenue, declined overall during the period. It dropped from 3.77 in 2018 to 2.76 in 2022, indicating a decreasing efficiency in using fixed assets to generate net revenues. Despite a slight recovery in 2021, the downward trend resumed in 2022.
Total Asset Turnover
Align Technology Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | 0.48 | — | — | |
| Elevance Health Inc. | 1.51 | 1.41 | 1.39 | — | — | |
| Intuitive Surgical Inc. | 0.48 | 0.42 | 0.39 | — | — | |
| Medtronic PLC | 0.35 | 0.32 | 0.32 | — | — | |
| UnitedHealth Group Inc. | 1.31 | 1.34 | 1.30 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 1.06 | 1.02 | 0.97 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.66 | 0.62 | 0.57 | — | — | |
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.
- Net Revenues
- Net revenues show a consistent upward trend from 2018 to 2021, rising from approximately 1.97 billion US dollars to nearly 3.95 billion US dollars. However, in 2022, there is a slight decline to about 3.73 billion US dollars, indicating a reduction after a period of continuous growth.
- Total Assets
- Total assets have grown substantially over the analyzed period. Starting at approximately 2.05 billion US dollars in 2018, total assets more than doubled by 2020 to roughly 4.83 billion US dollars and continued to rise to nearly 5.95 billion US dollars in both 2021 and 2022. The increase is particularly marked in 2020, reflecting significant asset accumulation.
- Total Asset Turnover
- The total asset turnover ratio, indicating the efficiency of asset use in generating revenue, remained steady at 0.96 in 2018 and 2019. There was a notable decline to 0.51 in 2020, followed by a moderate recovery to 0.67 in 2021 and a slight decrease to 0.63 in 2022. This pattern suggests a reduction in asset utilization efficiency starting in 2020, which improved somewhat in the following year but did not fully return to earlier levels.
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 | 1.06 | — | — | |
| Elevance Health Inc. | 4.29 | 3.80 | 3.64 | — | — | |
| Intuitive Surgical Inc. | 0.56 | 0.48 | 0.45 | — | — | |
| Medtronic PLC | 0.60 | 0.59 | 0.57 | — | — | |
| UnitedHealth Group Inc. | 4.14 | 3.98 | 3.90 | — | — | |
| Equity Turnover, Sector | ||||||
| Health Care Equipment & Services | 2.61 | 2.42 | 2.31 | — | — | |
| Equity Turnover, Industry | ||||||
| Health Care | 1.69 | 1.67 | 1.63 | — | — | |
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 data reveals several noteworthy trends over the five-year period ending in 2022.
- Net Revenues
- Net revenues have shown a general upward trend from 2018 through 2021, increasing from approximately 1.97 billion US dollars in 2018 to nearly 3.95 billion US dollars in 2021. However, in 2022 there was a decline to about 3.73 billion US dollars, marking a reduction from the previous year but still maintaining a level significantly above earlier years.
- Stockholders’ Equity
- Stockholders’ equity exhibited steady growth until 2019, followed by a considerable jump in 2020, more than doubling from the previous year to approximately 3.23 billion US dollars. This elevated level was sustained through 2021 and 2022, with slight fluctuations but no significant decreases, indicating a strengthening equity base during this period.
- Equity Turnover
- The equity turnover ratio shows variability throughout the period. Initially, it increased from 1.57 in 2018 to 1.79 in 2019, suggesting improved efficiency in generating sales from equity. In 2020, the ratio dropped sharply to 0.76, corresponding to the sharp rise in equity. It then partially recovered in 2021 and 2022, reaching 1.09 and 1.04 respectively, indicating a moderate improvement in leveraging equity to produce revenue but still falling short of earlier levels.
Overall, the data indicates significant growth in equity capital and a strong expansion in net revenues up to 2021, followed by a slight revenue decline in the last reported year. The fluctuations in equity turnover suggest challenges in maintaining revenue generation efficiency relative to the increased equity base, especially notable during the equity growth surge in 2020.