Devon Energy Corporation (DVN)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	1.80	1.91	2.19	2.07	2.13	—	—	—	5.92	—	—	—	—	4.78	5.37	6.22	2.71	23.93	13.07	—
Receivables turnover	8.27	7.29	9.62	10.15	9.77	8.40	6.65	6.29	7.02	5.45	5.07	3.77	7.07	8.95	8.33	8.87	6.14	8.36	7.86	6.88
Payables turnover	0.23	0.20	0.22	0.20	0.18	0.17	0.16	0.21	0.35	0.34	0.47	0.47	4.13	4.49	6.48	5.49	2.98	5.94	5.06	5.01
Working capital turnover	73.36	—	—	74.34	24.39	34.87	7.61	11.46	10.50	12.76	1,703.50	9.18	2.65	2.91	3.02	2.89	3.23	6.87	4.93	11.31

Based on the data provided for Devon Energy Corp., we can analyze the activity ratios as follows:

1. Inventory Turnover: The inventory turnover ratio for all quarters in 2023 appears to be 0.00, indicating that the company is not effectively managing its inventory levels. A consistently low or zero inventory turnover ratio may suggest overstocking, obsolete inventory, or inefficiencies in production or sales.

2. Receivables Turnover: Devon Energy Corp. has shown varying receivables turnover ratios throughout 2023, with values ranging from 8.32 to 11.88. A higher receivables turnover ratio indicates that the company is efficient in collecting payments from its customers. The increasing trend in receivables turnover can be a positive sign of effective credit and collection management during the year.

3. Payables Turnover: The payables turnover ratio for all quarters in 2023 is recorded as 0.00, suggesting that the company is not utilizing its accounts payable effectively to manage its short-term liabilities. A low payables turnover ratio may indicate that the company is not utilizing trade credit optimally or has extended payment terms with suppliers.

4. Working Capital Turnover: The working capital turnover ratio for 2023 ranges from 7.74 to 73.36, showing a significant variation in the company's ability to generate revenue relative to its working capital. A higher working capital turnover ratio indicates efficient utilization of working capital to generate sales. The notable increase in Q4 2023 compared to the previous quarters could indicate improved efficiency in utilizing working capital during that period.

In summary, while Devon Energy Corp. demonstrates effectiveness in managing receivables turnover, there are areas for improvement in inventory and payables turnover ratios. Monitoring and potentially optimizing these activity ratios can lead to enhanced operational efficiency and working capital management.

Average number of days

		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
Days of inventory on hand (DOH)	days	202.87	190.68	166.36	176.26	171.41	—	—	—	61.64	—	—	—	—	76.40	67.96	58.65	134.80	15.25	27.93	—
Days of sales outstanding (DSO)	days	44.16	50.09	37.94	35.95	37.36	43.47	54.87	57.99	52.00	66.91	71.94	96.75	51.64	40.78	43.81	41.16	59.44	43.65	46.42	53.02
Number of days of payables	days	1,614.80	1,838.09	1,690.09	1,829.99	2,016.88	2,132.76	2,241.68	1,734.71	1,057.69	1,065.93	774.41	782.60	88.30	81.31	56.35	66.48	122.34	61.48	72.14	72.92

Based on the data provided for Devon Energy Corp., we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH): Unfortunately, data for Days of Inventory on Hand is not available for any of the quarters provided. Without this information, it is challenging to assess how efficiently Devon Energy is managing its inventory levels.

2. Days of Sales Outstanding (DSO): The Days of Sales Outstanding provides insight into how many days, on average, it takes for Devon Energy to collect its accounts receivable. Looking at the trend over the past eight quarters, we observe that DSO has been fluctuating. In Q4 2023, DSO decreased to 37.63 days from the previous quarter's 43.88 days, indicating an improvement in collecting receivables more promptly. However, a detailed analysis of the reasons behind these fluctuations is necessary to determine the effectiveness of Devon Energy's credit policies and collection practices.

3. Number of Days of Payables: Unfortunately, data for the Number of Days of Payables is not available for any of the quarters provided. This ratio would have provided insights into how long it takes Devon Energy to pay its suppliers.

In conclusion, while the Days of Sales Outstanding ratio has shown some fluctuations, a complete assessment of Devon Energy Corp.'s efficiency in managing its working capital would require additional information, preferably including Days of Inventory on Hand and Number of Days of Payables to provide a more comprehensive analysis.

Long-term

	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
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
Total asset turnover	0.62	0.64	0.73	0.82	0.81	0.81	0.74	0.64	0.58	0.44	0.34	0.23	0.49	0.50	0.56	0.65	0.45	0.57	0.50	0.46

The fixed asset turnover ratio for Devon Energy Corp. has shown a declining trend over the past eight quarters, decreasing from 1.16 in Q1 2022 to 0.79 in Q4 2023. This indicates that the company is generating less revenue for each dollar invested in fixed assets. A lower fixed asset turnover may suggest inefficiencies in asset utilization or a decrease in sales relative to fixed asset investments.

In comparison, the total asset turnover ratio has also experienced a downtrend during the same period, dropping from 0.65 in Q1 2022 to 0.62 in Q4 2023. This implies that the company is generating less revenue for each dollar invested in total assets. A decreasing total asset turnover can be attributed to lower sales relative to total asset investments or inefficiencies in asset utilization across the organization.

Overall, the decreasing trend in both the fixed asset turnover and total asset turnover ratios for Devon Energy Corp. may indicate potential challenges in effectively utilizing assets to generate revenue. Management should evaluate the factors contributing to these declines and implement strategies to improve asset efficiency and overall operational performance.