DigitalOcean Holdings Inc (DOCN)
Fixed asset turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|
| Revenue | US$ in thousands | 780,615 | 692,884 | 576,322 | 428,561 |
| Property, plant and equipment | US$ in thousands | 432,544 | 305,444 | 273,170 | 249,643 |
| Fixed asset turnover | 1.80 | 2.27 | 2.11 | 1.72 |
December 31, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $780,615K ÷ $432,544K
= 1.80
The fixed asset turnover ratio for DigitalOcean Holdings Inc has shown a positive trend over the period from December 31, 2021, to December 31, 2024. The ratio increased from 1.72 in 2021 to 2.27 in 2023, signifying that the company generated $2.27 in revenue for every dollar invested in fixed assets during that year. However, the ratio slightly decreased to 1.80 in 2024.
The overall increase in fixed asset turnover indicates that DigitalOcean has been more efficient in utilizing its fixed assets to generate revenue over the years, which is a positive sign for investors. It suggests that the company is effectively managing and utilizing its fixed assets to drive sales and ultimately improve profitability.
The drop in the fixed asset turnover ratio in 2024 could raise some concerns, as it may indicate a potential inefficiency in asset utilization during that period. Further investigation into the reasons behind this decline would be necessary to determine if it is a temporary fluctuation or a more concerning trend.
In conclusion, the overall improvement in the fixed asset turnover ratio demonstrates DigitalOcean's enhanced efficiency in generating revenue from its fixed assets, highlighting the company's ability to make better use of its resources to drive growth and profitability.
Peer comparison
Dec 31, 2024