DigitalOcean Holdings Inc (DOCN)

Cash ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	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
Cash and cash equivalents	US$ in thousands	428,446	439,872	443,110	419,063	317,236	79,361	120,045	20,872	140,772	24,115	72,177	464,836	1,713,390
Short-term investments	US$ in thousands	0	0	0	0	94,532	304,720	430,462	591,681	723,462	800,539	1,093,980	1,090,370	0
Total current liabilities	US$ in thousands	220,955	176,010	220,156	188,951	192,645	184,289	167,311	54,240	165,516	98,808	74,227	62,451	58,239
Cash ratio		1.94	2.50	2.01	2.22	2.14	2.08	3.29	11.29	5.22	8.35	15.71	24.90	29.42

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($428,446K + $0K) ÷ $220,955K
= 1.94

The cash ratio of DigitalOcean Holdings Inc has shown a declining trend over the given period, starting at 29.42% on December 31, 2021, and decreasing to 1.94% on December 31, 2024.

The cash ratio indicates the company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio is generally preferred as it signifies a stronger ability to meet short-term obligations.

However, the decreasing trend in DigitalOcean's cash ratio may indicate potential liquidity concerns or inefficient cash management. It is essential for the company to closely monitor its cash position and ensure that it maintains adequate liquidity to meet its short-term obligations.