DigitalOcean Holdings Inc (DOCN)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 317,236 | 140,772 | 1,713,390 |
| Short-term investments | US$ in thousands | 94,532 | 723,462 | 0 |
| Total current liabilities | US$ in thousands | 192,645 | 165,516 | 58,239 |
| Cash ratio | 2.14 | 5.22 | 29.42 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($317,236K
+ $94,532K)
÷ $192,645K
= 2.14
The cash ratio of DigitalOcean Holdings Inc has shown a significant decline over the three-year period from 2021 to 2023. The ratio decreased from a high of 29.42 in 2021 to 5.22 in 2022, and further dropped to 2.14 in 2023. This trend indicates that the company's ability to cover its short-term liabilities with cash and cash equivalents has weakened over time. A lower cash ratio may suggest potential liquidity challenges or inefficiencies in managing cash resources. It would be prudent for stakeholders to monitor the company's cash position closely and assess its cash management strategies to ensure financial stability and solvency.
Peer comparison
Dec 31, 2023