DigitalOcean Holdings Inc (DOCN)

Current ratio

		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
Total current assets	US$ in thousands	515,813	502,994	471,459	642,069	698,612	945,991	908,356	1,231,130	1,611,900	1,770,060	642,783	629,117	607,282
Total current liabilities	US$ in thousands	188,951	192,645	184,289	167,311	54,240	165,516	98,808	74,227	62,451	58,239	57,577	55,387	46,049
Current ratio		2.73	2.61	2.56	3.84	12.88	5.72	9.19	16.59	25.81	30.39	11.16	11.36	13.19

March 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $515,813K ÷ $188,951K
= 2.73

The current ratio of DigitalOcean Holdings Inc has fluctuated over the past few quarters. As of March 31, 2024, the current ratio stands at 2.73, indicating that the company has $2.73 in current assets for every $1 in current liabilities.

The current ratio has generally been above 2, reflecting a healthy liquidity position. However, it experienced a significant spike to 12.88 in March 2023, signaling a temporary surge in current assets compared to liabilities. This was followed by a downward trend in subsequent quarters.

Despite some volatility, the current ratio has remained above 2 in most periods, suggesting that DigitalOcean has a solid ability to pay off its short-term obligations using its current assets. Investors and creditors typically view a current ratio above 1 as favorable, and DigitalOcean's ratios generally exceed this benchmark.

It is essential for the company to monitor and manage its current ratio to ensure continued liquidity and financial stability. fluctuations in the current ratio may be due to changes in the composition of current assets and liabilities, emphasizing the need for ongoing financial analysis and management.