Devon Energy Corporation (DVN)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 4,062,000 | 4,631,000 | 4,637,000 | 4,505,000 | 4,972,000 | 5,103,000 | 6,498,000 | 8,095,000 | 8,134,000 | 8,239,000 | 6,740,000 | 4,555,000 | 3,277,000 | 1,454,000 | 286,000 | -719,000 | -2,957,000 | -3,501,000 | -3,153,000 | -1,917,000 |
| Interest expense (ttm) | US$ in thousands | 401,000 | 375,000 | 370,000 | 378,000 | 384,000 | 386,000 | 385,000 | 382,000 | 381,000 | 380,000 | 381,000 | 386,000 | 399,000 | 371,000 | 343,000 | 310,000 | 270,000 | 262,000 | 265,000 | 265,000 |
| Interest coverage | 10.13 | 12.35 | 12.53 | 11.92 | 12.95 | 13.22 | 16.88 | 21.19 | 21.35 | 21.68 | 17.69 | 11.80 | 8.21 | 3.92 | 0.83 | -2.32 | -10.95 | -13.36 | -11.90 | -7.23 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,062,000K ÷ $401,000K
= 10.13
Interest coverage is a financial ratio that indicates a company's ability to pay interest expenses on its outstanding debt obligations. A higher interest coverage ratio is generally viewed more positively as it suggests that the company has sufficient earnings to cover its interest payments.
Analyzing the interest coverage ratio of Devon Energy Corporation over the provided timeframe shows a fluctuating trend. The ratio was negative in the first quarters of 2020 and 2021, indicating that the company's earnings were insufficient to cover its interest expenses during those periods.
However, from September 2021 onwards, Devon Energy's interest coverage ratio started to improve gradually. It turned positive in June 2021, reflecting an improvement in its ability to cover interest costs with its operating earnings. The ratio continued to increase steadily, indicating a healthier financial position in terms of meeting interest obligations over time.
As of December 31, 2024, Devon Energy Corporation's interest coverage ratio stands at 10.13, signifying that the company's earnings are sufficient to cover interest payments over ten times. This demonstrates a significantly improved financial position compared to the earlier negative ratios. Overall, the increasing trend in the interest coverage ratio of Devon Energy Corporation suggests a stronger ability to meet its debt obligations through operating earnings.
Peer comparison
Dec 31, 2024