DigitalOcean Holdings Inc (DOCN)

Short-term

Turnover ratios

The activity ratios for DigitalOcean Holdings Inc provide insights into how efficiently the company is managing its assets and liabilities to generate sales.

- Inventory turnover: The data for this ratio is not available for most of the periods, indicating that DigitalOcean may not have significant inventory holdings or the nature of its business may not require a high level of inventory turnover.

- Receivables turnover: The company has maintained a relatively stable receivables turnover ratio, fluctuating between 10.71 and 11.39 over the past few quarters. This suggests that DigitalOcean efficiently collects payments from its customers, with an average collection period of around 32 to 36 days.

- Payables turnover: The payables turnover ratio has shown some variability, ranging from 10.03 to 71.76, with a significant increase in the most recent quarter. A higher payables turnover ratio indicates that DigitalOcean is paying its suppliers more frequently, which could be a strategy to manage cash flows or negotiate favorable credit terms.

- Working capital turnover: The working capital turnover ratio has generally been increasing, reflecting improvements in how effectively DigitalOcean utilizes its working capital to generate revenue. The ratio indicates that the company is generating sales around 2.18 to 2.35 times for every dollar of working capital invested.

Overall, DigitalOcean appears to be efficiently managing its receivables and payables, as indicated by the turnover ratios. The increasing trend in the working capital turnover ratio suggests improved operational efficiency and potential growth opportunities for the company.

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Average number of days

Days of Inventory on Hand (DOH) measures how many days a company takes to sell its average inventory. During the most recent quarter, the company did not disclose its DOH figures. However, in the previous quarter, it had inventory for approximately 42.77 days, indicating that the company may have a significant level of inventory on hand compared to the recent past quarters.

Days of Sales Outstanding (DSO) indicates how many days it takes for a company to collect payment after making a sale. DigitalOcean Holdings Inc has maintained relatively stable DSO levels over the past few quarters, with DSO ranging from 32.05 to 34.09 days. This suggests that the company has been efficient in collecting payments from its customers.

Number of Days of Payables reflects how long a company takes to pay its suppliers. It is noteworthy that the number of days of payables has fluctuated significantly over the past quarters, ranging from 5.09 to 36.41 days. This variability could indicate changes in the company's payment policies or its relationships with suppliers.

Overall, DigitalOcean Holdings Inc should monitor its inventory levels to ensure optimal management, maintain its efficient collection of receivables, and manage payables effectively to support its liquidity position.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. In the case of DigitalOcean Holdings Inc, the fixed asset turnover ratio has been relatively stable over the past 10 quarters, ranging from 1.72 to 2.40. This indicates that the company has been consistently effective in generating sales from its fixed assets.

On the other hand, the total asset turnover ratio provides an indication of how well the company is using all its assets to generate revenue. DigitalOcean's total asset turnover ratio has also been relatively stable, with values ranging from 0.20 to 0.48. This suggests that the company has been efficient in generating revenue from its total asset base.

Overall, both the fixed asset turnover and total asset turnover ratios of DigitalOcean Holdings Inc show a consistent trend of efficiency in utilizing assets to generate sales over the past two and a half years. This indicates a strong operational performance in terms of asset utilization.