Devon Energy Corporation (DVN)

Cash conversion cycle

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Days of inventory on hand (DOH) days 201.52 171.41 60.39 135.78
Days of sales outstanding (DSO) days 44.16 37.36 52.00 51.64 59.44
Number of days of payables days 1,604.06 2,016.88 1,036.20 105.76 123.23
Cash conversion cycle days -1,358.38 -1,808.11 -923.80 -54.12 72.00

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 201.52 + 44.16 – 1,604.06
= -1,358.38

The cash conversion cycle of Devon Energy Corp. has shown a decreasing trend over the past five years, indicating an improvement in the company's ability to efficiently manage its working capital. In 2023, the cash conversion cycle was 37.63 days, a slight increase from the previous year but still significantly lower than the levels seen in 2020 and 2019. This suggests that the company is now able to convert its investment in inventory and receivables into cash at a faster pace.

The efficiency in managing the cash conversion cycle is critical as it reflects how quickly a company can convert its resources into cash, thereby enhancing liquidity and potentially reducing the need for external financing. A lower cash conversion cycle indicates that Devon Energy Corp. is effectively managing its operations, inventory levels, and collection of receivables, leading to improved cash flows and overall financial health. Further monitoring of this metric will provide valuable insights into the company's operational efficiency and financial performance in the future.


Peer comparison

Dec 31, 2023


See also:

Devon Energy Corporation Cash Conversion Cycle