Devon Energy Corporation (DVN)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	196.90	216.93	198.67	186.48	202.87	190.68	166.36	176.26	171.41	—	—	—	61.64	—	—	—	—	76.40	67.96	58.65
Days of sales outstanding (DSO)	days	53.93	49.67	44.15	47.11	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
Number of days of payables	days	1,498.84	1,790.20	1,630.18	1,711.04	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
Cash conversion cycle	days	-1,248.02	-1,523.61	-1,387.36	-1,477.44	-1,367.77	-1,597.32	-1,485.79	-1,617.78	-1,808.11	-2,089.29	-2,186.82	-1,676.73	-944.04	-999.01	-702.47	-685.84	-36.66	35.87	55.41	33.32

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 196.90 + 53.93 – 1,498.84
= -1,248.02

The cash conversion cycle of Devon Energy Corporation has shown considerable variability over the periods analyzed. The company's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, exhibited a fluctuating trend from positive to negative values.

Devon Energy Corporation experienced a positive cash conversion cycle in the earlier periods, indicating that it took the company several days to convert its investments into cash. However, in recent periods, the cash conversion cycle has notably become negative, suggesting that the company is now able to convert its investments into cash more quickly and efficiently. This improvement in the cash conversion cycle may signify enhanced operational efficiency and effective management of working capital.

The significant negative values observed in the latter part of the data indicate that Devon Energy Corporation has been able to manage its working capital in such a way that it can quickly convert its assets into cash, potentially providing the company with a competitive advantage and improved financial flexibility. It is essential for investors and stakeholders to consider the trend in the cash conversion cycle along with other financial metrics when assessing the overall financial performance and efficiency of Devon Energy Corporation.