DigitalOcean Holdings Inc (DOCN)

Quick 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
Cash	US$ in thousands	419,063	317,236	79,361	120,045	20,872	140,772	24,115	72,177	464,836	1,713,390	589,750	577,218	560,053
Short-term investments	US$ in thousands	0	94,532	304,720	430,462	591,681	723,462	800,539	1,093,980	1,090,370	0	—	—	—
Receivables	US$ in thousands	63,866	62,186	60,237	57,077	54,972	53,833	59,753	44,056	42,527	39,619	42,628	33,919	28,941
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
Quick ratio		2.56	2.46	2.41	3.63	12.31	5.55	8.95	16.30	25.58	30.10	10.98	11.03	12.79

March 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($419,063K + $0K + $63,866K) ÷ $188,951K
= 2.56

The quick ratio of DigitalOcean Holdings Inc has shown varying levels over the past several quarters. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that the company has more than enough liquid assets to cover its current liabilities.

As of March 31, 2024, DigitalOcean Holdings Inc had a quick ratio of 2.56, which indicates a strong ability to cover its short-term liabilities with its quick assets. The ratio has consistently been above 1 in recent quarters, reflecting a healthy financial position in terms of liquidity.

It's important to note the significant fluctuations in the quick ratio over the quarters, with notable peaks and troughs. For example, the quick ratio dropped significantly to 2.41 in September 2023 from a high of 12.31 in March 2023, suggesting fluctuations in the composition of its current assets and liabilities during these periods.

Overall, the trend of the quick ratio for DigitalOcean Holdings Inc indicates a generally strong liquidity position, with the company being able to comfortably meet its short-term obligations with its liquid assets. However, it is important to assess other financial ratios and metrics in conjunction with the quick ratio to gain a comprehensive understanding of the company's overall financial health.