DigitalOcean Holdings Inc (DOCN)

Receivables turnover

		Mar 31, 2024	Dec 31, 2023	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
Revenue (ttm)	US$ in thousands	712,480	692,884	675,008	650,061	614,129	576,322	532,986	492,299	462,227	428,561
Receivables	US$ in thousands	63,866	62,186	60,237	57,077	54,972	53,833	59,753	44,056	42,527	39,619	42,628	33,919	28,941
Receivables turnover		11.16	11.14	11.21	11.39	11.17	10.71	8.92	11.17	10.87	10.82

March 31, 2024 calculation

Receivables turnover = Revenue (ttm) ÷ Receivables
= $712,480K ÷ $63,866K
= 11.16

The receivables turnover ratio measures how efficiently a company is managing its accounts receivable by indicating how many times a company collects its average accounts receivable balance during a specific period. In the case of DigitalOcean Holdings Inc, the receivables turnover ratio has been relatively stable over the past several quarters, ranging from 8.92 to 11.39.

A higher receivables turnover ratio generally indicates that the company is collecting its outstanding receivables more quickly, which is a positive sign of efficiency in managing its credit sales and collecting payments from customers. In DigitalOcean's case, the average receivables turnover ratio of around 10.95 over the periods indicates a consistent and effective collection of accounts receivable.

A consistent and relatively high receivables turnover ratio suggests that DigitalOcean is efficiently managing its credit sales and collections, leading to improved cash flow and liquidity. However, it is important to note that interpreting the receivables turnover ratio in isolation may not provide a complete picture, and it is advisable to consider other related factors and financial metrics for a comprehensive analysis of the company's overall financial health and performance.