Devon Energy Corporation (DVN)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.28 | 0.29 | 0.23 | 0.23 | 0.23 | 0.23 | 0.26 | 0.26 | 0.26 | 0.26 | 0.28 | 0.30 | 0.31 | 0.31 | 0.32 | 0.34 | 0.43 | 0.42 | 0.41 | 0.39 |
| Debt-to-capital ratio | 0.37 | 0.38 | 0.31 | 0.32 | 0.32 | 0.33 | 0.36 | 0.36 | 0.36 | 0.36 | 0.39 | 0.41 | 0.41 | 0.42 | 0.44 | 0.46 | 0.60 | 0.59 | 0.57 | 0.52 |
| Debt-to-equity ratio | 0.58 | 0.62 | 0.45 | 0.47 | 0.47 | 0.49 | 0.56 | 0.56 | 0.55 | 0.57 | 0.64 | 0.70 | 0.70 | 0.73 | 0.77 | 0.84 | 1.49 | 1.42 | 1.33 | 1.10 |
| Financial leverage ratio | 2.10 | 2.12 | 2.00 | 2.05 | 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 |
Devon Energy Corporation's solvency ratios indicate its ability to meet its long-term financial obligations and the extent of its reliance on debt financing.
1. Debt-to-assets ratio: This ratio decreased from 0.39 in March 2020 to 0.23 in December 2024. The declining trend suggests that the company's reliance on debt to finance its assets has reduced over the years, indicating improved financial health and lower risk of insolvency.
2. Debt-to-capital ratio: The ratio declined from 0.52 in March 2020 to 0.37 in December 2024. This indicates that the proportion of debt in the company's capital structure has decreased, reflecting a stronger financial position and lower financial risk.
3. Debt-to-equity ratio: This ratio also showed a decreasing trend from 1.10 in March 2020 to 0.58 in December 2024. The lower ratio implies that the company is financing a smaller portion of its assets with equity, which can be seen as a positive sign of financial stability and reduced dependence on external funding.
4. Financial leverage ratio: The financial leverage ratio decreased from 2.84 in March 2020 to 2.10 in December 2024. This decline indicates that the company has been reducing its financial leverage over time, resulting in a lower risk of default and better capacity to withstand economic challenges.
Overall, the solvency ratios of Devon Energy Corporation demonstrate a positive trend towards reduced reliance on debt and improved financial health, suggesting a stronger ability to meet its long-term obligations and maintain sustainable operations.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The interest coverage ratio for Devon Energy Corporation has shown a volatile trend over the past few years.
The ratio was negative in 2020 and early 2021, indicating that the company's earnings were insufficient to cover its interest expenses during those periods, reflecting a weak financial position and a potential risk of default.
However, from March 2022 onwards, the interest coverage ratio started to improve significantly, reaching its peak at 21.68 in September 2022. This significant increase suggests that Devon Energy's ability to cover its interest payments improved substantially, indicating a healthier financial position and reduced default risk.
The ratio remained above 10 from September 2022 to March 2024, indicating a comfortable cushion to cover interest costs. This stability in the interest coverage ratio suggests that Devon Energy was able to generate sufficient earnings to meet its interest obligations during this period.
Although there was a slight decline in the interest coverage ratio towards the end of 2024, the ratio remained above 10, reflecting a continued ability to cover interest expenses comfortably.
Overall, the improving trend in Devon Energy Corporation's interest coverage ratio from 2022 onwards indicates a positive turnaround in its financial health and ability to meet its debt obligations.