Devon Energy Corporation (DVN)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.26 | 0.31 | 0.43 | 0.31 |
| Debt-to-capital ratio | 0.32 | 0.36 | 0.41 | 0.60 | 0.43 |
| Debt-to-equity ratio | 0.47 | 0.55 | 0.70 | 1.49 | 0.74 |
| Financial leverage ratio | 2.03 | 2.12 | 2.27 | 3.44 | 2.36 |
Devon Energy Corp.'s solvency ratios indicate a trend of improving financial leverage and debt management over the past five years. The Debt-to-assets ratio has decreased from 0.46 in 2020 to 0.26 in 2023, suggesting that the company has reduced its reliance on debt to finance its assets. The Debt-to-capital ratio has also shown a similar improvement, declining from 0.61 in 2020 to 0.35 in 2023, indicating that Devon Energy has been able to lower its debt relative to its total capital.
Furthermore, the Debt-to-equity ratio has decreased significantly from 1.57 in 2020 to 0.53 in 2023, indicating a strengthening of the company's financial structure and a reduced dependency on debt funding. The Financial leverage ratio has also shown positive progress, decreasing from 3.44 in 2020 to 2.03 in 2023, reflecting a lower level of financial risk and leverage within the company.
Overall, the declining trends in these solvency ratios demonstrate Devon Energy Corp.'s efforts to enhance its financial stability and reduce its debt burden, which indicates a positive outlook for the company's ability to meet its financial obligations in the future.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 12.95 | 21.35 | 8.21 | -10.95 | -0.43 |
The interest coverage ratio of Devon Energy Corp. has shown fluctuations over the past five years. In 2023, the interest coverage ratio stood at 15.64, reflecting the company's ability to cover its interest expenses approximately 15.64 times using its operating income. This represents a decrease from the previous year when the ratio was 25.63.
In 2021, the interest coverage ratio was 9.87, indicating a slight improvement from the negative ratio of -0.49 in 2020, suggesting that the company had sufficient operating income to cover its interest expenses nearly 10 times.
The significant improvement from negative ratios in 2020 to positive ratios in subsequent years indicates a positive trend in the company's ability to meet its interest obligations. However, it is essential to monitor these ratios closely to ensure the company's financial health and ability to service its debt obligations.