Devon Energy Corporation (DVN)

Fixed asset turnover

		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	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	15,258,000	15,412,000	17,008,000	19,180,000	19,169,000	19,143,000	17,177,000	13,968,000	12,206,000	9,213,000	6,814,000	4,791,000	4,828,000	5,137,000	5,816,000	7,228,000	6,220,000	8,161,000	8,389,000	8,310,000
Property, plant and equipment	US$ in thousands	19,328,000	19,031,000	18,763,000	18,515,000	18,106,000	17,793,000	15,113,000	15,074,000	15,008,000	15,078,000	15,189,000	15,274,000	5,393,000	5,556,000	5,686,000	5,780,000	8,593,000	10,177,000	10,037,000	13,864,000
Fixed asset turnover		0.79	0.81	0.91	1.04	1.06	1.08	1.14	0.93	0.81	0.61	0.45	0.31	0.90	0.92	1.02	1.25	0.72	0.80	0.84	0.60

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $15,258,000K ÷ $19,328,000K
= 0.79

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. A higher fixed asset turnover ratio indicates that a company is generating more sales for each dollar invested in fixed assets.

Analyzing the trend of Devon Energy Corp.'s fixed asset turnover over the past eight quarters, we see a gradual decline from 1.16 in Q2 2022 to 0.79 in Q4 2023. This decline indicates that Devon Energy Corp. is becoming less efficient in utilizing its fixed assets to generate sales.

A fixed asset turnover ratio below 1 suggests that Devon Energy Corp. is generating less in sales compared to the value of its fixed assets. This may be a concern as it could indicate underutilization of fixed assets or inefficiencies in the production process.

It is important for management to investigate the reasons behind the declining fixed asset turnover ratio and take necessary steps to improve asset utilization and efficiency in order to enhance overall profitability and return on assets.