Devon Energy Corporation (DVN)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 4,062,000 | 4,972,000 | 8,134,000 | 3,277,000 | -2,957,000 |
| Long-term debt | US$ in thousands | 8,398,000 | 5,672,000 | 6,189,000 | 6,482,000 | 4,298,000 |
| Total stockholders’ equity | US$ in thousands | 14,496,000 | 12,061,000 | 11,167,000 | 9,262,000 | 2,885,000 |
| Return on total capital | 17.74% | 28.04% | 46.87% | 20.81% | -41.17% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,062,000K ÷ ($8,398,000K + $14,496,000K)
= 17.74%
From the data provided, Devon Energy Corporation's return on total capital has exhibited considerable variability over the five-year period under review. The return on total capital was notably negative at -41.17% as of December 31, 2020. However, there was a significant improvement in performance in the following years, with the return on total capital reaching 20.81% as of December 31, 2021, a further increase to 46.87% by December 31, 2022, followed by a slight decrease to 28.04% by December 31, 2023, and finally dropping to 17.74% as of December 31, 2024.
The fluctuations in Devon Energy Corporation's return on total capital suggest changes in the efficiency and profitability of the company's capital utilization over the years. The negative return in 2020 may indicate operational challenges or potentially excessive capital deployment. Subsequent improvements in the return on total capital indicate that the company implemented measures to enhance efficiency and profitability.
It is essential for investors and analysts to monitor these metrics closely to assess the company's ability to generate returns on the total capital invested in the business. The positive trend in return on total capital from 2021 to 2023 is generally favorable, although the slight decline in 2024 warrants further investigation to understand the factors influencing the company's performance in that period.
Peer comparison
Dec 31, 2024