DigitalOcean Holdings Inc (DOCN)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|
| Cash | US$ in thousands | 428,446 | 317,236 | 140,772 | 1,713,390 |
| Short-term investments | US$ in thousands | 0 | 94,532 | 723,462 | 0 |
| Receivables | US$ in thousands | 72,486 | 62,186 | 53,833 | 39,619 |
| Total current liabilities | US$ in thousands | 220,955 | 192,645 | 165,516 | 58,239 |
| Quick ratio | 2.27 | 2.46 | 5.55 | 30.10 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($428,446K
+ $0K
+ $72,486K)
÷ $220,955K
= 2.27
The quick ratio of DigitalOcean Holdings Inc has shown a significant decline over the past few years. As of December 31, 2021, the quick ratio stood at 30.10, indicating a very strong liquidity position. However, there was a substantial drop in the quick ratio to 5.55 as of December 31, 2022, and a further decrease to 2.46 by December 31, 2023. As of the most recent period ending December 31, 2024, the quick ratio was recorded at 2.27.
A quick ratio above 1 typically indicates that a company has enough liquid assets to cover its short-term liabilities. While the quick ratio of DigitalOcean Holdings Inc remains above 1 in all the years provided, the downward trend may raise concerns about the company's ability to meet its short-term obligations using its most liquid assets. Further investigation into the company's liquidity management and potential reasons behind the declining quick ratio would be warranted to assess the overall financial health and risk profile of the company.
Peer comparison
Dec 31, 2024