Devon Energy Corporation (DVN)
Liquidity 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 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 | 2.00 | 1.72 | 1.49 | 1.37 |
| Quick ratio | 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 | 1.29 | 1.42 | 1.31 | 1.29 |
| Cash ratio | 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 | 0.76 | 0.83 | 1.00 | 0.67 |
Devon Energy Corp.'s liquidity ratios, as shown in the table, provide insights into the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has exhibited some fluctuations over the quarters. It decreased from 1.25 in Q4 2022 to 0.96 in Q3 2023 before slightly improving to 1.07 in Q4 2023.
Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also showed variability over the quarters. It dropped from 1.19 in Q4 2022 to 0.89 in Q3 2023 but then recovered to 0.99 in Q4 2023.
The cash ratio, which indicates the company's ability to cover its current liabilities with its cash and cash equivalents, witnessed a downward trend from 0.62 in Q4 2022 to 0.34 in Q3 2023 before rebounding to 0.45 in Q4 2023.
Overall, while Devon Energy Corp. has experienced fluctuations in its liquidity ratios, it is essential to closely monitor these ratios to assess the company's ability to navigate short-term financial challenges and fulfill its financial obligations.
See also:
Devon Energy Corporation Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -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 | 71.91 | -2.57 | 2.21 | -19.90 |
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that a company is efficiently managing its working capital and generating cash quickly.
Analyzing Devon Energy Corp.'s cash conversion cycle from Q4 2022 to Q4 2023 shows fluctuations in the efficiency of its working capital management. The company experienced a downward trend in the first half of 2023, reaching its lowest level of 30.73 days in Q1 2023. This improvement suggests that Devon Energy Corp. was able to convert its investments into cash more rapidly during this period.
However, from Q2 2023 to Q3 2023, the cash conversion cycle increased, indicating a potential slowdown in converting assets into cash. Q4 2023 saw a slight improvement but remained higher than the levels in the first quarter of 2023.
Overall, Devon Energy Corp.'s cash conversion cycle has shown some volatility throughout the analyzed period. It is essential for the company to monitor and manage its working capital effectively to ensure efficient operations and maximize cash flow generation.