DigitalOcean Holdings Inc (DOCN)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 283,967 | 211,927 | 170,595 |
| Payables | US$ in thousands | 3,957 | 21,138 | 12,657 |
| Payables turnover | 71.76 | 10.03 | 13.48 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $283,967K ÷ $3,957K
= 71.76
The payables turnover ratio for DigitalOcean Holdings Inc has shown significant variability over the past three years. In 2021, the payables turnover was 13.48, indicating the company converted its accounts payables into cash 13.48 times during the year. This ratio increased substantially to 10.03 in 2022, suggesting a slower rate of payables turnover compared to the previous year.
However, in 2023, the payables turnover dramatically jumped to 71.76, reflecting a significant improvement in the efficiency of paying off its accounts payables relative to the cost of goods sold. This sharp increase could be due to various reasons such as renegotiated payment terms with suppliers, more efficient cash management practices, or changes in purchasing patterns.
Overall, the increasing trend in payables turnover from 2021 to 2023 demonstrates an enhanced ability of DigitalOcean Holdings Inc to manage its liabilities effectively and optimize its cash flow cycle. This improvement may signify potential benefits for the company in terms of liquidity management and working capital efficiency.
Peer comparison
Dec 31, 2023