DigitalOcean Holdings Inc (DOCN)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 91,007 | 35,721 | -14,730 | -14,457 |
| Long-term debt | US$ in thousands | 1,485,370 | 1,477,800 | 1,470,270 | 1,462,680 |
| Total stockholders’ equity | US$ in thousands | -202,955 | -313,698 | 47,569 | 578,197 |
| Return on total capital | 7.10% | 3.07% | -0.97% | -0.71% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $91,007K ÷ ($1,485,370K + $-202,955K)
= 7.10%
DigitalOcean Holdings Inc's return on total capital has shown fluctuations over the years. The ratio was negative in both 2021 and 2022, indicating that the company's return was less than the capital employed. However, there was a significant improvement in 2023 with a return of 3.07%, suggesting better utilization of capital to generate profits. This positive trend continued in 2024 with a notable increase to 7.10%, indicating improved efficiency in generating returns for every dollar of total capital employed. Overall, the increasing trend in return on total capital from 2021 to 2024 reflects a strengthening financial performance and a more effective capital utilization strategy by DigitalOcean Holdings Inc.
Peer comparison
Dec 31, 2024