Devon Energy Corporation (DVN)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	1.92	1.81	2.13	6.04	—
Receivables turnover	6.77	8.27	9.77	7.02	7.07
Payables turnover	0.25	0.23	0.18	0.35	3.45
Working capital turnover	135.08	73.36	24.39	10.50	2.65

Based on the provided data on Devon Energy Corporation's activity ratios, several key observations can be made:

1. Inventory Turnover:
- The inventory turnover ratio indicates how effectively the company is managing its inventory.
- Devon Energy's inventory turnover has decreased steadily from 6.04 in 2021 to 1.92 in 2024.
- A decreasing trend in inventory turnover may suggest that the company is holding onto more inventory or facing challenges in selling its products efficiently.

2. Receivables Turnover:
- The receivables turnover ratio measures how efficiently the company is collecting payments from its customers.
- Devon Energy's receivables turnover fluctuated over the years, reaching a peak of 9.77 in 2022 and declining to 6.77 in 2024.
- Despite the fluctuations, the company seems to be managing its accounts receivable turnover reasonably well.

3. Payables Turnover:
- The payables turnover ratio reflects how quickly the company is paying its suppliers.
- Devon Energy's payables turnover has decreased significantly from 3.45 in 2020 to 0.25 in 2024.
- The declining trend in payables turnover may indicate that the company is taking longer to pay its suppliers, which could impact its relationships and liquidity.

4. Working Capital Turnover:
- The working capital turnover ratio shows how efficiently the company is utilizing its working capital to generate sales.
- Devon Energy's working capital turnover has shown a significant increase from 2.65 in 2020 to 135.08 in 2024.
- The sharp increase in working capital turnover may suggest that the company is effectively using its working capital to drive sales growth and operational efficiency.

Overall, Devon Energy's activity ratios suggest varying levels of efficiency in managing inventory, receivables, payables, and working capital over the years. Monitoring these ratios can provide insights into the company's operational performance and financial management strategies.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	190.27	201.52	171.41	60.39	—
Days of sales outstanding (DSO)	days	53.93	44.16	37.36	52.00	51.64
Number of days of payables	days	1,448.35	1,604.06	2,016.88	1,036.20	105.76

Devon Energy Corporation's activity ratios show trends in how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand increased significantly from 2021 to 2024, indicating that Devon Energy had more days of inventory on hand in recent years. This may suggest that the company is carrying excess inventory or facing challenges in selling its products quickly.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding remained relatively stable between 2020 and 2024, with a slight increase in 2024. This suggests that Devon Energy is collecting its accounts receivable in a consistent manner over the years.

3. Number of Days of Payables:
- The number of days of payables has shown significant fluctuations, with a dramatic increase in 2021 followed by a slight decrease in subsequent years. A high number of days of payables can indicate that Devon Energy is taking longer to pay its suppliers, potentially straining its relationships with vendors.

Overall, Devon Energy Corporation's activity ratios highlight potential areas of concern in inventory management and supplier relationships, which may warrant further investigation to ensure operational efficiency and financial stability.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	0.64	0.79	1.06	0.81	0.90
Total asset turnover	0.52	0.62	0.81	0.58	0.49

The fixed asset turnover ratio for Devon Energy Corporation has exhibited fluctuations over the past five years. In 2020, the ratio was 0.90, indicating that the company generated $0.90 in revenue for every dollar invested in fixed assets. The ratio decreased to 0.81 in 2021 before experiencing an increase to 1.06 in 2022. However, it declined to 0.79 in 2023 and further to 0.64 in 2024.

On the other hand, the total asset turnover ratio, which reflects how efficiently the company utilizes its total assets to generate revenue, also demonstrated variability during the same period. Starting at 0.49 in 2020, the ratio increased to 0.58 in 2021 and further to 0.81 in 2022. Subsequently, it decreased to 0.62 in 2023 and to 0.52 in 2024.

Overall, the trends in both fixed asset turnover and total asset turnover ratios suggest that Devon Energy Corporation's efficiency in generating revenue from its assets has been somewhat unstable over the past five years, indicating the need for further examination and potential strategic adjustments to enhance operational effectiveness.