DigitalOcean Holdings Inc (DOCN)
Quick 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 | 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 |
| Receivables | US$ in thousands | 72,486 | 68,936 | 67,435 | 63,866 | 62,186 | 60,237 | 57,077 | 54,972 | 53,833 | 59,753 | 44,056 | 42,527 | 39,619 |
| 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 |
| Quick ratio | 2.27 | 2.89 | 2.32 | 2.56 | 2.46 | 2.41 | 3.63 | 12.31 | 5.55 | 8.95 | 16.30 | 25.58 | 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 fluctuation over the period from December 31, 2021, to December 31, 2024. The quick ratio started at a robust 30.10 on December 31, 2021, indicating a strong ability to cover its short-term liabilities with its most liquid assets. However, the quick ratio gradually declined to 2.27 by December 31, 2024.
This downward trend suggests a potential deterioration in the company's short-term liquidity position and ability to meet immediate financial obligations without relying heavily on inventory or other less liquid assets. A quick ratio below 1 may indicate potential difficulties in meeting short-term obligations, although the ratios above 1 still indicate that the company can cover its current liabilities with its quick assets.
Overall, DigitalOcean Holdings Inc's decreasing quick ratio over the analyzed period highlights the importance of monitoring the company's liquidity position and ensuring it maintains a healthy balance between liquid assets and current liabilities for sustainable operations and financial stability.
Peer comparison
Dec 31, 2024