Devon Energy Corporation (DVN)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.04 | 1.11 | 1.11 | 1.04 | 1.07 | 0.96 | 0.98 | 1.09 | 1.25 | 1.16 | 1.55 | 1.32 | 1.38 | 1.21 | 1.00 | 1.18 | 2.26 | 2.03 | 2.33 | 2.61 |
| Quick ratio | 0.96 | 1.20 | 1.00 | 0.94 | 0.92 | 0.63 | 0.55 | 0.90 | 1.06 | 1.00 | 1.44 | 1.25 | 1.24 | 1.09 | 0.88 | 1.00 | 1.90 | 1.33 | 1.50 | 1.51 |
| Cash ratio | 0.25 | 0.47 | 0.38 | 0.34 | 0.29 | -0.00 | -0.11 | 0.26 | 0.42 | 0.34 | 0.81 | 0.66 | 0.68 | 0.61 | 0.44 | 0.57 | 1.42 | 1.00 | 1.02 | 0.98 |
Devon Energy Corporation's liquidity ratios show fluctuations over the reporting periods. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, declined from 2.61 in March 2020 to 1.04 in December 2024. This downward trend indicates potential challenges in meeting short-term liabilities.
In contrast, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also displayed a decreasing trend from 1.51 in March 2020 to 0.96 in December 2024. This suggests a diminishing ability to meet immediate obligations without relying on the sale of inventory.
Furthermore, the cash ratio, which reflects the firm's ability to pay off current liabilities using only its cash and cash equivalents, fluctuated between 0.26 and 1.42 over the period. The sharp decrease in the cash ratio in June 2023 and subsequent recovery indicates variability in the company's cash position.
Overall, the declining trend in both the current and quick ratios, as well as the fluctuating cash ratio, may indicate potential liquidity challenges for Devon Energy Corporation. It is essential for the company to closely monitor its liquidity position and take appropriate measures to ensure it can meet its short-term obligations.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle for Devon Energy Corporation has experienced significant fluctuations over the reporting periods. Starting at 33.32 days on March 31, 2020, the cycle increased to 55.41 days by June 30, 2020, indicating a longer time taken to convert resources into cash. However, by December 31, 2020, the cycle turned negative at -36.66 days, implying an efficient cash conversion process, with operating activities generating cash quickly.
This trend continued through the following quarters and years, with the cash conversion cycle remaining consistently negative. Negative values such as -944.04 days on December 31, 2021, and reaching as low as -2,186.82 days on June 30, 2022, suggest that Devon Energy was operating with substantial efficiency in terms of cash flow generation and management.
The extremely negative values of the cash conversion cycle indicate that the company was able to convert its investments in materials and resources into cash at an exceptionally rapid pace, potentially signaling robust operational performance and effective working capital management. Overall, the data indicates that Devon Energy Corporation has been successful in optimizing its cash conversion cycle in recent periods.