Devon Energy Corporation (DVN)

Financial leverage ratio

		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
Total assets	US$ in thousands	24,490,000	24,241,000	23,355,000	23,420,000	23,721,000	23,557,000	23,194,000	21,778,000	21,025,000	21,057,000	20,065,000	20,457,000	9,912,000	10,326,000	10,357,000	11,144,000	13,717,000	14,394,000	16,649,000	18,077,000
Total stockholders’ equity	US$ in thousands	12,061,000	11,639,000	11,021,000	10,977,000	11,167,000	10,873,000	10,090,000	9,300,000	9,262,000	8,924,000	8,399,000	8,353,000	2,885,000	3,023,000	3,227,000	3,919,000	5,802,000	6,542,000	6,994,000	7,857,000
Financial leverage ratio		2.03	2.08	2.12	2.13	2.12	2.17	2.30	2.34	2.27	2.36	2.39	2.45	3.44	3.42	3.21	2.84	2.36	2.20	2.38	2.30

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $24,490,000K ÷ $12,061,000K
= 2.03

The financial leverage ratio of Devon Energy Corp. has been fluctuating over the past eight quarters, ranging from a low of 2.03 in Q4 2023 to a high of 2.34 in Q1 2022. This ratio indicates that, on average, the company has been utilizing debt to finance its operations at a level approximately 2 to 2.3 times higher than its equity.

The downward trend from Q1 2022 to Q4 2023 suggests that the company may have been reducing its reliance on debt over time. A lower financial leverage ratio can indicate a stronger financial position and a decreased risk of default, as the company has less debt compared to its equity.

However, it's important to note that a financial leverage ratio above 2 indicates that Devon Energy Corp. is still significantly leveraged, which could expose the company to risk in case of adverse economic conditions or interest rate hikes. Monitoring this ratio over time is crucial for understanding the company's debt management strategy and financial stability.