Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Income Statement
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Long-term Activity Ratios (Summary)
Align Technology Inc., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The analysis of the financial ratios over the observed quarterly periods reveals several notable trends related to asset utilization and turnover.
- Net Fixed Asset Turnover
- This ratio exhibited a generally downward trend from March 31, 2019 (3.61) through September 30, 2023 (3.00). Although there were minor fluctuations, a steady decline can be observed, particularly from the second half of 2021 onward, where the ratio dropped from approximately 3.75 to around 3.00 by the last date. This suggests a diminishing efficiency in generating sales from net fixed assets over time.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This adjusted ratio followed a similar declining pattern to the net fixed asset turnover, starting at 3.29 and decreasing to roughly 2.74 by the end of the period. The inclusion of operating leases and right-of-use assets does not significantly alter the overall trend, reinforcing the observation of reduced operational efficiency with respect to fixed assets.
- Total Asset Turnover
- The total asset turnover ratio shows a marked decrease starting in early 2020. Initially stable near 0.93-0.97 until December 31, 2019, it sharply declined to around 0.51 by the end of 2020. Although a modest recovery was observed in 2021, peaking at 0.67, the ratio again declined towards 0.60 by late 2023. This pattern indicates challenges in efficiently using total assets to generate revenue, especially during the early pandemic period, with partial improvement but no sustained recovery to pre-2020 levels.
- Equity Turnover
- Equity turnover underwent significant volatility. From a high near 1.79 in December 2019, it decreased sharply to approximately 0.75-0.84 in the mid-2020 periods. Post-2020, the ratio recovered, reaching above 1.0 by mid-2021, and stabilized around the range of 1.03-1.10 through 2022. However, a gradual decline resumed into 2023, ending near 1.00. This indicates fluctuations in how effectively the equity base is generating sales, with an initial loss of turnover during 2020 and eventual, yet limited, recovery thereafter.
In summary, there is a clear pattern of decreased efficiency in asset and equity utilization beginning in early 2020, coinciding with a challenging external environment. While some recovery in total asset and equity turnover ratios occurred through 2021 and 2022, these ratios did not return to pre-2020 levels. Net fixed asset turnover ratios steadily declined throughout the observed timeframe, indicating persistent issues in leveraging fixed assets for revenue generation.
Net Fixed Asset Turnover
Align Technology Inc., net fixed asset turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Net revenues | |||||||||||||||||||||||||
| Property, plant and equipment, net | |||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Net fixed asset turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Net fixed asset turnover
= (Net revenuesQ3 2023
+ Net revenuesQ2 2023
+ Net revenuesQ1 2023
+ Net revenuesQ4 2022)
÷ Property, plant and equipment, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends regarding revenues, property assets, and efficiency metrics.
- Net Revenues
- Net revenues experienced variability over the observed periods, initially rising from approximately $549 million in Q1 2019 to a peak exceeding $1 billion in the latter part of 2021. A marked decline occurred during the early stages of 2020, likely impacted by external factors, dropping to around $352 million in Q2 2020. This was followed by a recovery phase, with revenues rebounding to near pre-decline levels by the end of 2020 and maintaining a generally stable range around $900 million to just over $1 billion through 2021 and early 2023. While revenues showed resilience, the latter part of the series indicates some volatility and a mild downward adjustment entering 2023.
- Property, Plant and Equipment (Net)
- The net value of property, plant, and equipment consistently increased throughout the timeline. Starting at approximately $575 million in the first quarter of 2019, assets grew steadily, reaching around $1.27 billion by Q3 2023. This represents a strong capital investment trend, with continuous asset base expansion that nearly doubled over the period. Growth in fixed assets outpaced revenue growth, implying ongoing capital expenditures and possible capacity enhancement or modernization efforts.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which measures how efficiently the company uses its fixed assets to generate revenue, demonstrated a declining trend. Beginning at 3.61 in Q1 2019, the ratio improved slightly until the end of 2019 but subsequently declined, falling to a low near 2.92 by mid-2023. This downward movement suggests less efficient utilization of fixed assets over time. Despite the revenue recovery, the growing asset base without commensurate revenue increases likely contributed to this ratio’s reduction.
In summary, the data indicate that while revenues have recovered and remained relatively stable after a mid-2020 disruption, the company has consistently invested in expanding its fixed asset base. However, this increase in assets has not translated into proportional revenue gains, leading to a decrease in asset turnover efficiency. This pattern may warrant further assessment of capital allocation and operational efficiency strategies going forward.
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 (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset)
= (Net revenuesQ3 2023
+ Net revenuesQ2 2023
+ Net revenuesQ1 2023
+ Net revenuesQ4 2022)
÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ( + + + )
÷ =
- Net Revenues
- Net revenues exhibited a generally positive trend from 2019 through 2021, starting at approximately $549 million in Q1 2019 and reaching a peak of about $1.03 billion in Q4 2021. However, there was a notable decline beginning in early 2022 with revenues decreasing from roughly $973 million in Q1 2022 to about $890 million in Q3 2022. Following this decline, a mild recovery occurred, with revenues rising again to around $1 billion in Q2 2023 before a slight dip to approximately $960 million in Q3 2023.
- Property, Plant and Equipment (including operating lease, right-of-use asset)
- The net value of property, plant, and equipment consistently increased over the entire period. It rose from approximately $632 million in Q1 2019 to a high of about $1.4 billion in Q2 2023, indicating ongoing investment in fixed assets. A slight decrease was observed in Q3 2023, with the value reducing marginally to roughly $1.39 billion. This steady upward trend reflects expansion and capital expenditure efforts throughout the reviewed quarters.
- Net Fixed Asset Turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio showed variability throughout the period. It started at 3.29 in Q1 2019 and peaked at 3.5 in Q4 2019. Following that, there was a decline to 2.91 in Q3 2020, before a fluctuating upward trend brought it back to around 3.33 by Q1 2021. Since then, the ratio gradually decreased, reaching its lowest point at 2.66 in Q2 2023. This suggests that the efficiency with which fixed assets generate revenue has weakened over the recent periods despite asset growth, indicating either slower revenue growth relative to fixed asset increases or underutilization of assets.
- Summary
- Overall, the company demonstrated increasing asset investment over time along with growth in revenue until early 2022. However, revenue showed signs of volatility and a softening trend thereafter. The decreasing net fixed asset turnover ratio in recent quarters implies diminishing returns on asset investments and potential inefficiency in leveraging fixed assets for revenue generation. These trends could warrant further analysis into operational efficiency and asset utilization strategies moving forward.
Total Asset Turnover
Align Technology Inc., total asset turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Net revenues | |||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Total asset turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Total asset turnover
= (Net revenuesQ3 2023
+ Net revenuesQ2 2023
+ Net revenuesQ1 2023
+ Net revenuesQ4 2022)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's performance and asset management over the observed periods.
- Net Revenues
- Net revenues demonstrated overall growth from early 2019 through 2021, increasing from approximately $549 million in the first quarter of 2019 to a peak exceeding $1 billion in mid-2021. However, this upward trajectory was interrupted in 2020, particularly in the second quarter, where revenues dropped sharply to around $352 million, likely reflecting external disruptions during that period. Following this dip, revenues recovered steadily and reached new highs by late 2021 but showed some volatility and slight declines during 2022 and 2023. Despite fluctuations, revenues generally remained near the $900 million to $1 billion range in recent quarters.
- Total Assets
- Total assets expanded significantly over the timeframe, rising from approximately $2.23 billion at the end of March 2019 to over $6.3 billion by the third quarter of 2023. The most substantial increase occurred during 2020, where assets nearly doubled relative to early 2019 levels, indicating sizable investments or acquisitions. After reaching this elevated level in 2020 and early 2021, total assets grew at a slower pace but continued an upward trend, reflecting ongoing asset accumulation or capital expansion.
- Total Asset Turnover
- The total asset turnover ratio, which measures the efficiency of asset utilization in generating revenue, shows a declining trend starting in 2019. Initially close to 0.93-0.97, the ratio dropped sharply in 2020 to near 0.5, coinciding with the surge in total assets and the temporary reduction in revenues. Post-2020, there was a modest recovery in asset turnover through 2021 and into early 2022, climbing to around 0.68. Nonetheless, from mid-2022 through 2023, the asset turnover ratio experienced a gradual decline back toward 0.6, suggesting a slight decrease in efficiency or that asset growth has outpaced revenue increases in this later period.
In summary, the company experienced strong revenue growth through 2019 and early 2021, disrupted temporarily in 2020, while total assets grew substantially, particularly in 2020. Despite asset base expansion, the efficiency of asset use in revenue generation declined, with only partial recovery after 2020. Recent quarters show some revenue stabilization but a modest decrease in turnover efficiency, indicating potential areas for improving asset utilization to support sustained revenue growth.
Equity Turnover
Align Technology Inc., equity turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Net revenues | |||||||||||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Equity turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Equity Turnover, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Equity turnover
= (Net revenuesQ3 2023
+ Net revenuesQ2 2023
+ Net revenuesQ1 2023
+ Net revenuesQ4 2022)
÷ Stockholders’ equity
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in key metrics over the periods analyzed.
- Net Revenues
- Net revenues demonstrated a general upward trajectory from early 2019 through 2021, increasing from approximately 549 million USD in Q1 2019 to over 1 billion USD in mid-2021. However, a decline is observed beginning in 2022, with revenues dropping below 1 billion USD by Q1 2022 and fluctuating somewhat thereafter, settling near 960 million USD by Q3 2023. A notable dip occurred in mid-2020, likely connected to external factors impacting operations, but a recovery and growth followed until 2021 before the subsequent decrease.
- Stockholders’ Equity
- Stockholders’ equity showed substantial growth starting in 2020, nearly doubling from around 1.3 billion USD in late 2019 to over 3.2 billion USD by late 2020. This upward trend continued steadily through 2023, reaching approximately 3.8 billion USD by Q3 2023. The increase suggests consistent capitalization or retained earnings growth during this period, contrasting with the earlier periods where equity remained relatively stable around 1.3 billion USD.
- Equity Turnover Ratio
- The equity turnover ratio experienced a marked decline in 2020, dropping from a range of 1.59 to 1.79 in 2019 down to around 0.75-0.84 throughout 2020. This suggests that net revenues generated per dollar of equity were lower during this period, possibly due to the rapid increase in equity not being matched by similar growth in revenues. From late 2020 onward, the ratio exhibited gradual improvement, rising to a range slightly above 1.0 by 2021 and maintaining around 1.0 thereafter through 2023, indicating a stabilization in the efficiency of equity usage to generate revenues.
Overall, while the company expanded its equity base significantly beginning in 2020, the efficiency of converting that equity into revenues was reduced during the same period but later stabilized. The revenue growth was robust through 2021 but encountered a reversal in 2022, implying challenges in maintaining growth momentum following earlier expansion.