DigitalOcean Holdings Inc (DOCN)

Current 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
Total current assets	US$ in thousands	541,718	552,006	543,723	515,813	502,994	471,459	642,069	698,612	945,991	908,356	1,231,130	1,611,900	1,770,060
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
Current ratio		2.45	3.14	2.47	2.73	2.61	2.56	3.84	12.88	5.72	9.19	16.59	25.81	30.39

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $541,718K ÷ $220,955K
= 2.45

The current ratio of DigitalOcean Holdings Inc has displayed a declining trend over the analyzed period, decreasing from 30.39 as of December 31, 2021, to 2.45 as of December 31, 2024. The current ratio measures the company's ability to meet its short-term obligations with its current assets. A higher current ratio is generally preferred as it indicates a stronger liquidity position.

During the period, the current ratio remained above 1 at all times, indicating that DigitalOcean Holdings Inc had sufficient current assets to cover its current liabilities. However, the significant decline in the ratio suggests a potential deterioration in the company's liquidity position and ability to meet its short-term obligations.

The sharp decrease in the current ratio may raise concerns about the company's ability to manage its working capital effectively and meet its upcoming financial obligations. Investors and stakeholders may closely monitor this ratio to assess the company's liquidity risk and financial health. Further analysis of the company's financial statements and operational performance is recommended to understand the underlying reasons for the declining current ratio and evaluate the company's overall financial stability.