Adjusted Financial Ratios
Adjusted Financial Ratios (Summary)
Devon Energy Corp., adjusted financial ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Total Asset Turnover
- The total asset turnover ratio shows a decline from 0.55 in 2018 to 0.45 in 2019, followed by a slight increase to 0.49 in 2020. Subsequently, it rises more significantly to 0.58 in 2021 and further to 0.81 in 2022. This indicates an overall improvement in asset efficiency over the five-year period, particularly strong in the last two years.
- Current Ratio
- The current ratio remains above 1 throughout the period, indicating liquidity is generally maintained above the threshold for short-term obligations. It rises from approximately 2 in 2018 to a peak of 2.33 in 2020, suggesting stronger liquidity management during this time frame. However, it declines notably in 2021 and 2022, reaching 1.25 in 2022, which might indicate tightening liquidity or increased current liabilities relative to current assets in the latter years.
- Debt to Equity Ratio
- The debt to equity ratio rises from 0.65 in 2018 to a peak of 1.58 in 2020, indicating increased leverage and reliance on debt financing up to that year. After 2020, the ratio declines substantially to 0.73 in 2021 and further to 0.6 in 2022, reflecting a deleveraging trend and potentially improved equity position or reduced debt load.
- Debt to Capital Ratio
- A pattern similar to debt to equity emerges. The debt to capital ratio increases steadily from 0.39 in 2018 to 0.61 in 2020, then decreases to 0.42 in 2021 and 0.37 in 2022. This reinforces the observation of higher leverage until 2020, followed by a reduction in debt's share of total capital thereafter.
- Financial Leverage
- Financial leverage increases from 2.13 in 2018 to a peak of 3.44 in 2020, which aligns with the increased debt ratios indicating higher borrowing levels. Post-2020, financial leverage reduces to 2.27 in 2021 and 2.12 in 2022, consistent with the company's deleveraging efforts.
- Net Profit Margin
- The reported net profit margin exhibits substantial volatility. It starts strong at 28.54% in 2018, plunges to negative territory at -5.71% in 2019, and deteriorates further to -55.51% in 2020, indicating significant losses. Recovery initiates in 2021 with 23.05%, improving to 31.38% in 2022. Adjusted net profit margin data corroborates this pattern, showing deeper negative margins in 2019 and 2020 and a robust turnaround in 2021 and 2022.
- Return on Equity (ROE)
- The ROE follows a similar trajectory with a positive 33.36% in 2018, falling to a negative -6.12% in 2019 and a drastic low of -92.89% in 2020. Subsequent years witness recovery with 30.37% in 2021 and a significant surge to 53.86% in 2022. Adjusted ROE replicates these trends with somewhat more pronounced negative impacts during the downturn and stronger recovery in the final years.
- Return on Assets (ROA)
- The ROA trend parallels the ROE and profitability margins. It decreases from 15.66% in 2018 to -2.59% in 2019 and further to -27.04% in 2020, reflecting poor asset profitability during this period. It rises back to a positive 13.38% in 2021 and climbs further to 25.36% in 2022. The adjusted ROA confirms the pattern with slightly deeper negative returns during 2019-2020 and heightened recovery by 2022.
Devon Energy Corp., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Total asset turnover = Revenues ÷ Total assets
= 19,169 ÷ 23,721 = 0.81
2 Adjusted total assets. See details »
3 2022 Calculation
Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 19,169 ÷ 23,730 = 0.81
The financial data reveals a fluctuating yet overall positive trajectory in key performance indicators over the analyzed periods.
- Revenues
- The revenue figures demonstrate significant volatility with a noticeable dip from 10,734 million USD in 2018 to 4,828 million USD in 2020. However, there is a strong recovery post-2020, as revenues increase sharply to 12,206 million USD in 2021 and further to 19,169 million USD in 2022. This indicates a robust rebound and growth in sales activities in the most recent years.
- Total Assets
- Total assets show a declining trend from 19,566 million USD in 2018 down to 9,912 million USD in 2020, suggesting possible divestitures, asset sales, or depreciation effects. Thereafter, assets surge again to 21,025 million USD in 2021 and 23,721 million USD in 2022, signaling renewed investment or acquisition activity and possibly expanded operations or asset base.
- Reported Total Asset Turnover
- This ratio, which measures revenue generated per unit of asset, declines from 0.55 in 2018 to 0.45 in 2019, before slightly recovering to 0.49 in 2020. A marked increase follows, reaching 0.58 in 2021 and strongly climbing to 0.81 in 2022. This improvement suggests enhanced efficiency in using assets to generate sales, particularly in the last two years.
- Adjusted Total Assets and Adjusted Total Asset Turnover
- Adjusted total assets closely track the reported total assets, with minimal discrepancies, indicating consistency in asset valuation adjustments. Similarly, the adjusted asset turnover ratio follows the same pattern as the reported figures, reinforcing the conclusion of improving asset utilization efficiency over the recent periods.
In summary, the company experienced a downturn in both revenues and asset base up to 2020, followed by a significant recovery phase in the subsequent two years. The increase in asset turnover ratios during this recovery indicates better operational efficiency, with assets being leveraged more effectively to generate revenue. This suggests a positive shift in financial and operational management leading to enhanced performance.
Adjusted Current Ratio
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= 3,891 ÷ 3,105 = 1.25
2 Adjusted current assets. See details »
3 Adjusted current liabilities. See details »
4 2022 Calculation
Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 3,900 ÷ 3,071 = 1.27
- Current Assets
- Current assets showed a decreasing trend from 2018 to 2020, declining from 4,437 million US dollars in 2018 to 3,260 million US dollars in 2020. This was followed by a recovery in 2021, reaching 4,249 million US dollars, before slightly decreasing again to 3,891 million US dollars in 2022.
- Current Liabilities
- Current liabilities declined significantly from 2,226 million US dollars in 2018 to 1,440 million US dollars in 2020. However, they sharply increased thereafter, rising to 3,087 million US dollars in 2021 and maintaining a similar level at 3,105 million US dollars in 2022.
- Reported Current Ratio
- The reported current ratio exhibited an improving trend from 1.99 in 2018 to a peak of 2.26 in 2020, indicating improved short-term liquidity during this period. Nonetheless, this ratio declined considerably in 2021 to 1.38 and further decreased to 1.25 in 2022, suggesting a weakening in liquidity position over the last two years.
- Adjusted Current Assets
- Adjusted current assets followed a pattern similar to reported current assets, decreasing from 4,445 million US dollars in 2018 to 3,271 million US dollars in 2020, rebounding to 4,256 million US dollars in 2021, and then slightly declining to 3,900 million US dollars in 2022.
- Adjusted Current Liabilities
- Adjusted current liabilities decreased from 2,179 million US dollars in 2018 to 1,405 million US dollars in 2020, before sharply increasing to 3,049 million US dollars in 2021 and remaining fairly stable at 3,071 million US dollars in 2022.
- Adjusted Current Ratio
- The adjusted current ratio improved from 2.04 in 2018 to a peak of 2.33 in 2020, reflecting enhanced liquidity when adjustments are considered. Similar to the reported current ratio, it then deteriorated to 1.40 in 2021 and further to 1.27 in 2022, indicating a marked reduction in adjusted liquidity in recent years.
Adjusted Debt to Equity
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity attributable to Devon
= 6,697 ÷ 11,167 = 0.60
2 Adjusted total debt. See details »
3 Adjusted total equity. See details »
4 2022 Calculation
Adjusted debt to equity = Adjusted total debt ÷ Adjusted total equity
= 6,718 ÷ 12,883 = 0.52
- Total debt
- The total debt decreased significantly from 2018 to 2019, dropping from 5,947 million USD to 4,541 million USD. It remained relatively stable in 2020 at 4,550 million USD before increasing sharply in 2021 to 6,737 million USD and then slightly declining to 6,697 million USD in 2022.
- Stockholders’ equity attributable to Devon
- Equity showed a notable decline from 9,186 million USD in 2018 to 2,885 million USD in 2020, indicating a weakening in the equity base during this period. However, there was a strong recovery in 2021 and 2022, with equity rising to 9,262 million USD and then to 11,167 million USD respectively.
- Reported debt to equity ratio
- The debt to equity ratio reflected the changes in debt and equity levels. It increased significantly to 1.58 in 2020, indicating higher leverage and financial risk. This ratio then improved substantially in 2021 and 2022, returning to more conservative levels of 0.73 and 0.6 respectively, suggesting improved balance sheet strength.
- Adjusted total debt
- The adjusted total debt followed a similar pattern to total debt, decreasing from 6,285 million USD in 2018 to 4,555 million USD in 2019 and remaining stable at 4,553 million USD in 2020. It rose sharply again in 2021 to 6,760 million USD and slightly dropped to 6,718 million USD in 2022.
- Adjusted total equity
- Adjusted equity mirrored the trend in reported equity, decreasing from 10,134 million USD in 2018 to 3,186 million USD in 2020, followed by a recovery to 9,835 million USD in 2021 and a further increase to 12,883 million USD in 2022. This indicates a restoration of the adjusted equity base after a period of significant decline.
- Adjusted debt to equity ratio
- This ratio increased from 0.62 in 2018 to 1.43 in 2020, evidencing increased leverage. Subsequently, it improved to 0.69 in 2021 and further to 0.52 in 2022, reflecting a stronger capital structure and reduced reliance on debt financing relative to equity.
Adjusted Debt to Capital
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 6,697 ÷ 17,864 = 0.37
2 Adjusted total debt. See details »
3 Adjusted total capital. See details »
4 2022 Calculation
Adjusted debt to capital = Adjusted total debt ÷ Adjusted total capital
= 6,718 ÷ 19,601 = 0.34
- Total Debt
- The company's total debt decreased significantly from 5,947 million US dollars at the end of 2018 to 4,541 million US dollars in 2019, remaining relatively stable at approximately 4,550 million in 2020. However, there was a marked increase in 2021 to 6,737 million, followed by a slight decrease to 6,697 million in 2022.
- Total Capital
- Total capital exhibited a declining trend from 15,133 million US dollars in 2018 to a low of 7,435 million in 2020. Subsequently, total capital rebounded sharply, rising to 15,999 million in 2021 and further increasing to 17,864 million in 2022.
- Reported Debt to Capital Ratio
- This ratio increased from 0.39 in 2018 to a peak of 0.61 in 2020, indicating a higher proportion of debt relative to capital during that period. After 2020, the ratio declined to 0.42 in 2021 and further to 0.37 in 2022, suggesting an improvement in the company's capital structure with reduced leverage.
- Adjusted Total Debt
- Adjusted total debt shows a pattern similar to total debt, starting at 6,285 million US dollars in 2018, dropping to around 4,553-4,555 million during 2019 and 2020, then rising sharply to 6,760 million in 2021 before a slight decrease to 6,718 million in 2022.
- Adjusted Total Capital
- Adjusted total capital declined sharply from 16,419 million in 2018 to a trough of 7,739 million in 2020, followed by a significant recovery to 16,595 million in 2021 and an increase to 19,601 million in 2022, reflecting improved capitalization.
- Adjusted Debt to Capital Ratio
- The adjusted debt to capital ratio followed a similar trajectory to the reported ratio, rising from 0.38 in 2018 to 0.59 in 2020, indicating increased leverage. This was followed by a substantial decrease to 0.41 in 2021 and further reduction to 0.34 in 2022, highlighting a strengthening financial position with lower adjusted leverage levels.
Adjusted Financial Leverage
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity attributable to Devon
= 23,721 ÷ 11,167 = 2.12
2 Adjusted total assets. See details »
3 Adjusted total equity. See details »
4 2022 Calculation
Adjusted financial leverage = Adjusted total assets ÷ Adjusted total equity
= 23,730 ÷ 12,883 = 1.84
The financial data reveals significant fluctuations in the company's asset base and equity over the five-year period.
- Total assets
- There is a marked decline from 19,566 million US dollars at the end of 2018 to 9,912 million in 2020, followed by a sharp recovery to 21,025 million in 2021 and a further increase to 23,721 million in 2022. This indicates a period of contraction followed by substantial expansion in asset holdings.
- Stockholders’ equity attributable to Devon
- This metric mirrored the total assets trend initially, decreasing from 9,186 million in 2018 down to 2,885 million in 2020. Subsequently, it rebounded significantly to 9,262 million in 2021 and continued upward to 11,167 million in 2022, suggesting strong equity growth after a period of decline.
- Reported financial leverage
- The leverage ratio increased steadily from 2.13 in 2018 to a peak of 3.44 in 2020, indicating a rise in debt relative to equity during the contraction phase. Following this peak, leverage declined to 2.27 in 2021 and further to 2.12 in 2022, reflecting a deleveraging trend as the company strengthened its equity base and increased assets.
- Adjusted total assets
- The adjusted asset figures closely follow the pattern of total assets, from 19,912 million in 2018 down to 9,907 million in 2020, then rising sharply to 21,025 million in 2021 and lastly 23,730 million in 2022. These adjusted numbers reinforce the observed asset volatility.
- Adjusted total equity
- Similarly, adjusted equity decreased from 10,134 million in 2018 to 3,186 million in 2020, before regaining strength by rising to 9,835 million in 2021 and climbing further to 12,883 million in 2022, underscoring the recovery in shareholder interest and capital strength within the period.
- Adjusted financial leverage
- The adjusted leverage ratio shows an increase from 1.96 in 2018 to 3.11 in 2020, reflecting increased reliance on debt. It then declines to 2.14 in 2021 and 1.84 in 2022, signaling a shift to reduced leverage and improved financial stability in recent years.
In summary, the company experienced a significant contraction phase between 2018 and 2020 characterized by shrinking assets and equity accompanied by rising leverage. This phase was succeeded by a period of strong recovery and growth from 2021 to 2022, with expanding assets and equity and a conscious reduction in leverage, indicating strengthened financial health and improved capital structure management.
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net profit margin = 100 × Net earnings (loss) attributable to Devon ÷ Revenues
= 100 × 6,015 ÷ 19,169 = 31.38%
2 Adjusted net earnings (loss). See details »
3 2022 Calculation
Adjusted net profit margin = 100 × Adjusted net earnings (loss) ÷ Revenues
= 100 × 7,200 ÷ 19,169 = 37.56%
- Net Earnings (Loss) attributable to Devon
- The net earnings exhibited significant volatility over the five-year period. In 2018, there was a strong profit of 3,064 million US dollars, followed by notable losses in 2019 and 2020, amounting to -355 million and -2,680 million US dollars respectively. The trend reversed in 2021 with a return to profitability at 2,813 million US dollars, and this positive momentum continued in 2022 with a substantial increase to 6,015 million US dollars.
- Revenues
- Revenues showed a declining trend from 2018 through 2020, dropping from 10,734 million US dollars in 2018 to 4,828 million US dollars in 2020. However, there was a marked recovery starting in 2021, with revenues rising sharply to 12,206 million US dollars, and further increasing to 19,169 million US dollars in 2022, surpassing prior peaks.
- Reported Net Profit Margin
- The reported net profit margin mirrored the volatility in net earnings. It started at a healthy 28.54% in 2018, turned negative in 2019 and plummeted significantly to -55.51% in 2020. The margin rebounded to positive territory in 2021 at 23.05% and improved further to 31.38% in 2022, indicating enhanced profitability relative to revenues.
- Adjusted Net Earnings (Loss)
- Adjusted net earnings followed a similar pattern to net earnings. The company reported positive adjusted earnings of 892 million US dollars in 2018, followed by losses in the subsequent two years of -1,269 million and -2,725 million US dollars respectively. Adjusted earnings rebounded in 2021 to 2,850 million US dollars and significantly strengthened to 7,200 million US dollars in 2022, suggesting successful operational adjustments or one-time items impacting earlier years.
- Adjusted Net Profit Margin
- The adjusted net profit margin exhibited considerable fluctuation, starting at 8.31% in 2018, declining severely to negative margins of -20.4% in 2019 and -56.44% in 2020. The margin recovered to 23.35% in 2021 and increased further to 37.56% in 2022, indicating a marked improvement in underlying profitability once non-recurring items were excluded.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROE = 100 × Net earnings (loss) attributable to Devon ÷ Stockholders’ equity attributable to Devon
= 100 × 6,015 ÷ 11,167 = 53.86%
2 Adjusted net earnings (loss). See details »
3 Adjusted total equity. See details »
4 2022 Calculation
Adjusted ROE = 100 × Adjusted net earnings (loss) ÷ Adjusted total equity
= 100 × 7,200 ÷ 12,883 = 55.89%
- Net earnings (loss) attributable to Devon
- The net earnings demonstrated significant volatility over the period. In 2018, the company reported a strong profit of $3,064 million, followed by losses in 2019 (-$355 million) and a substantial loss in 2020 (-$2,680 million). However, there was a pronounced recovery in 2021 with net earnings rebounding to $2,813 million and further increasing sharply to $6,015 million in 2022.
- Stockholders’ equity attributable to Devon
- Stockholders' equity showed a declining trend from $9,186 million in 2018 to $2,885 million in 2020, reflecting a contraction in equity likely linked to the losses incurred. From 2021 onwards, equity recovered robustly, climbing to $9,262 million and further to $11,167 million by 2022, indicating restoration of financial strength.
- Reported Return on Equity (ROE)
- Reported ROE mirrored the net earnings trend, with a strong positive return of 33.36% in 2018 followed by negative returns of -6.12% in 2019 and a drastic decline to -92.89% in 2020. Thereafter, the company achieved a significant turnaround with ROE improving to 30.37% in 2021 and substantially rising to 53.86% in 2022, reflecting enhanced profitability relative to equity.
- Adjusted net earnings (loss)
- Adjusted net earnings followed a pattern consistent with reported earnings but at lower magnitudes. The company reported adjusted earnings of $892 million in 2018, falling to losses of -$1,269 million and -$2,725 million in 2019 and 2020, respectively. Recovery ensued in 2021 with gains of $2,850 million, accelerating to $7,200 million in 2022, underscoring a strong operational rebound.
- Adjusted total equity
- Adjusted total equity also declined from $10,134 million in 2018 to $3,186 million in 2020, before rising robustly to $9,835 million in 2021 and $12,883 million in 2022. This reflects a recovery in the adjusted financial base consistent with the return to profitability.
- Adjusted Return on Equity (ROE)
- The adjusted ROE exhibited considerable fluctuation, starting at 8.8% in 2018, declining sharply to -20.17% in 2019 and dropping further to a severe negative of -85.53% in 2020. The metric then rebounded strongly to 28.98% in 2021, followed by a substantial increase to 55.89% in 2022, indicating a marked improvement in return efficiency on the adjusted equity base.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROA = 100 × Net earnings (loss) attributable to Devon ÷ Total assets
= 100 × 6,015 ÷ 23,721 = 25.36%
2 Adjusted net earnings (loss). See details »
3 Adjusted total assets. See details »
4 2022 Calculation
Adjusted ROA = 100 × Adjusted net earnings (loss) ÷ Adjusted total assets
= 100 × 7,200 ÷ 23,730 = 30.34%
- Net Earnings (Loss) Attributable to Devon
- The net earnings displayed significant volatility over the examined period. Starting with a strong positive value of 3,064 million US dollars in 2018, the company experienced consecutive losses in 2019 and 2020 (-355 million and -2,680 million, respectively). A recovery occurred in 2021 with net earnings rebounding to 2,813 million US dollars, followed by a substantial increase in 2022 reaching 6,015 million US dollars. This suggests a notable turnaround from losses to significant profitability within two years.
- Total Assets
- Total assets decreased from 19,566 million US dollars in 2018 to a low point of 9,912 million in 2020, indicating a contraction in the asset base during this timeframe. Subsequently, total assets expanded sharply to 21,025 million in 2021 and further to 23,721 million in 2022, exceeding the 2018 level. This pattern may reflect restructuring, divestitures, or acquisition activities followed by expansion or asset accumulation.
- Reported Return on Assets (ROA)
- The reported ROA mirrored the net earnings trend. It started at a robust 15.66% in 2018, then declined into negative territory in 2019 (-2.59%) and worsened significantly in 2020 (-27.04%). The ROA recovered to positive 13.38% in 2021 and improved further to 25.36% in 2022. This indicates operational challenges during the middle years, with profitability relative to assets improving markedly thereafter.
- Adjusted Net Earnings (Loss)
- Adjusted net earnings portray a similar directional trend as the reported net earnings but exhibit more pronounced losses in the 2019 and 2020 periods (-1,269 million and -2,725 million, respectively). Adjusted net earnings rebound strongly in 2021 to 2,850 million and surge to 7,200 million in 2022, reinforcing the pattern of a significant recovery and improved financial performance after a difficult phase.
- Adjusted Total Assets
- Adjusted total assets follow the pattern of reported total assets, showing a decline from 19,912 million in 2018 to 9,907 million in 2020. Subsequent growth is observed in 2021 and 2022 to 21,025 million and 23,730 million, respectively. This consistency between reported and adjusted assets affirms the underlying changes in the asset base over the period.
- Adjusted Return on Assets (ROA)
- The adjusted ROA reflects the trend of adjusted earnings and adjusted assets, starting at 4.48% in 2018 and decreasing sharply to -9.25% in 2019 and -27.51% in 2020. Recovery is evident with 13.56% in 2021, followed by a substantial increase to 30.34% in 2022. This reinforces the interpretation of significant operational difficulties in the middle years, followed by strong performance improvements.