Devon Energy Corporation (DVN)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	14,375,000	18,337,000	10,950,000	-1,592,000	2,162,000
Total assets	US$ in thousands	24,490,000	23,721,000	21,025,000	9,912,000	13,717,000
Operating ROA		58.70%	77.30%	52.08%	-16.06%	15.76%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $14,375,000K ÷ $24,490,000K
= 58.70%

Operating return on assets (operating ROA) is a key financial performance ratio that measures a company's ability to generate operating income from its assets. Over the past five years, Devon Energy Corp.'s operating ROA has shown varying trends:

1. In 2023, Devon Energy Corp. reported an operating ROA of 20.05%, reflecting operational efficiency in generating income relative to its assets. This indicates that the company was able to effectively utilize its assets to generate operating profits.

2. The operating ROA significantly decreased in 2022 to 33.39%, suggesting a decline in operational efficiency compared to the previous year. Despite the decrease, the ratio remained relatively high, indicating that Devon Energy Corp. was still able to generate substantial operating income from its assets.

3. In 2021, the operating ROA stood at 15.44%, signaling a moderate performance in terms of generating operating income relative to assets. This ratio showed an improvement compared to the previous year, indicating enhanced operational efficiency.

4. The operating ROA was negative in 2020, at -1.34%, indicating that Devon Energy Corp. experienced operational losses relative to its asset base during this period. This negative ratio signifies that the company's operational performance was not sufficient to cover its asset costs.

5. In 2019, Devon Energy Corp. reported a positive operating ROA of 1.29%, indicating a minimal operational return on its assets. While the ratio was positive, it was relatively low, suggesting that the company's operational efficiency in generating income from assets was limited.

Overall, Devon Energy Corp.'s operating ROA has shown fluctuations over the past five years, with varying levels of operational efficiency in utilizing assets to generate income. It is essential for the company to monitor and improve its operational performance to ensure sustainable profitability and effective asset utilization in the long term.