DigitalOcean Holdings Inc (DOCN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|
| Inventory turnover | — | — | — | — |
| Receivables turnover | 10.77 | 11.14 | 10.71 | 10.82 |
| Payables turnover | 5.77 | 74.65 | 10.03 | 13.48 |
| Working capital turnover | 2.43 | 2.23 | 0.74 | 0.25 |
1. Inventory Turnover:
- The inventory turnover ratio for DigitalOcean Holdings Inc is not available ("—") for all the years provided. This may be due to the nature of the company's operations or the data not being disclosed.
2. Receivables Turnover:
- The receivables turnover ratio indicates how efficiently the company collects its accounts receivable during a specific period.
- DigitalOcean's receivables turnover ratios have been consistent over the years, averaging around 10.91.
- This stability suggests that the company has been effectively managing its accounts receivable collection process.
3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays off its suppliers.
- DigitalOcean's payables turnover has been quite variable, ranging from 5.77 to 74.65 over the years.
- The significant increase in 2023 could indicate changes in payment terms with suppliers or a shift in the company's purchasing strategy.
4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate sales.
- DigitalOcean's working capital turnover has been on an upward trend, indicating improved utilization of working capital to generate revenue.
- The growth in this ratio from 0.25 in 2021 to 2.43 in 2024 suggests that the company has become more efficient in converting working capital into sales.
In conclusion, the analysis of activity ratios for DigitalOcean Holdings Inc shows mixed efficiency levels in managing inventories, receivables, payables, and working capital. The company's stable receivables turnover and improving working capital turnover ratios indicate effective management in these areas, while the fluctuating payables turnover may require further investigation into the company's supplier relationships and procurement processes.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — |
| Days of sales outstanding (DSO) | days | 33.89 | 32.76 | 34.09 | 33.74 |
| Number of days of payables | days | 63.29 | 4.89 | 36.41 | 27.08 |
Based on the provided data, we can analyze DigitalOcean Holdings Inc's activity ratios as follows:
1. Days of Inventory on Hand (DOH): The information regarding days of inventory on hand is not available for the years 2021 to 2024. This ratio typically measures how many days it takes for a company to sell its entire inventory, reflecting the company's efficiency in managing its inventory levels.
2. Days of Sales Outstanding (DSO): The days of sales outstanding represent the average number of days it takes for the company to collect its accounts receivable. DigitalOcean's DSO ranged from 32.76 days to 34.09 days between 2021 and 2024. A lower DSO indicates that the company is efficient in collecting payments from its customers.
3. Number of Days of Payables: The number of days of payables reflects how long it takes for a company to pay its suppliers. DigitalOcean's number of days of payables varied significantly from 4.89 days in 2023 to 63.29 days in 2024. A longer period suggests that the company is taking longer to pay its suppliers, potentially indicating liquidity challenges or favorable credit terms.
Overall, the analysis of these activity ratios provides insights into DigitalOcean Holdings Inc's efficiency in managing its inventory, collecting receivables, and paying its suppliers over the years 2021 to 2024.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|
| Fixed asset turnover | 1.80 | 2.27 | 2.11 | 1.72 |
| Total asset turnover | 0.48 | 0.47 | 0.32 | 0.20 |
DigitalOcean Holdings Inc's long-term activity ratios reflect its efficiency in utilizing its assets to generate sales revenue.
1. Fixed asset turnover:
- The fixed asset turnover ratio measures how effectively a company utilizes its fixed assets to generate revenue.
- Over the years from 2021 to 2024, DigitalOcean's fixed asset turnover has shown an improving trend. The ratio increased from 1.72 in 2021 to 2.27 in 2023 before slightly decreasing to 1.80 in 2024.
- A higher fixed asset turnover ratio indicates that the company is generating more revenue per dollar of fixed assets, which is generally a positive sign.
2. Total asset turnover:
- The total asset turnover ratio measures the company's ability to generate sales from its total assets.
- Throughout the period from 2021 to 2024, DigitalOcean's total asset turnover has been increasing steadily. The ratio grew from 0.20 in 2021 to 0.48 in 2024.
- A higher total asset turnover ratio suggests that the company is more efficient in using its assets to generate sales, indicating good asset utilization.
In conclusion, DigitalOcean Holdings Inc has shown improvement in its efficiency in utilizing both fixed assets and total assets to generate sales revenue over the years analyzed. The increasing trend in total asset turnover indicates improved efficiency in overall asset utilization, while the fluctuation in fixed asset turnover may warrant further investigation into the company's fixed asset management strategies.