What is Devon Energy Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Devon Energy's Probability of Financial Distress (%) is 0.01%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of Devon Energy's Probability of Financial Distress (%)
For the Oil & Gas E&P subindustry, Devon Energy's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Devon Energy's Probability of Financial Distress (%) Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Devon Energy's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Devon Energy's Probability of Financial Distress (%) falls into.
Devon Energy Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -8.81 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.01% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
Devon Energy (Devon Energy) Business Description
Traded in Other Exchanges
Address
333 West Sheridan Avenue, Oklahoma, OK, USA, 73102-5015
Devon Energy, based in Oklahoma City, is one of the largest independent exploration and production companies in North America. The firm's asset base is spread throughout onshore North America and includes exposure to the Delaware, STACK, Eagle Ford, Powder River Basin, and Bakken plays. At year-end 2022, Devon's proved reserves totaled 1.8 billion barrels of oil equivalent, and net production that year was 611 thousand boe/d, of which oil and natural gas liquids made up 73% of production, with natural gas accounting for the remainder.
Executives
| Dennis C Cameron |
officer: EVP and General Counsel |
DEVON ENERGY, 333 W. SHERIDAN AVE, OKLAHOMA CITY OK 73102 |
| Clay M Gaspar |
officer: EVP and COO |
333 W. SHERIDAN AVE, OKLAHOMA CITY OK 73102 |
| Richard E Muncrief |
director, officer: President and CEO |
333 W. SHERIDAN AVE, OKLAHOMA CITY OK 73102 |
| John E Bethancourt |
director |
6001 BOLLINGER CANYON ROAD, SAN RAMON CA 94583 |
| Michael N Mears |
director |
ONE WILLIAMS CENTER, MD 28-1, TULSA OK 74172 |
| Gennifer F. Kelly |
director |
1702 COMMERCE WAY, BRENTWOOD TN 37027 |
| Valerie Williams |
director |
C/O OMNICOM GROUP INC., 280 PARK AVENUE, NEW YORK NY 10017 |
| Ann G Fox |
director |
2001 KIRBY DRIVE, SUITE 200, HOUSTON TX 77019 |
| Kelt Kindick |
director |
DEVON ENERGY CORP, 333 W SHERIDAN AVE, OKLAHOMA CITY OK 73102 |
| Jeffrey L Ritenour |
officer: EVP & CHIEF FINANCIAL OFFICER |
333 W. SHERIDAN AVENUE, OKLAHOMA CITY OK 73102 |
| Jeremy D. Humphers |
officer: SVP Chief Accounting Officer |
333 WEST SHERIDAN AVENUE, OKLAHOMA CITY OK 73102-5015 |
| Tana K Cashion |
officer: SVP Human Resources and Admin |
333 W. SHERIDAN AVENUE, OKLAHOMA CITY OK 73102 |
| Felix Investments Holdings Ii, Llc |
director, 10 percent owner |
1530 16TH STREET, SUITE 500, DENVER CO 80202 |
| Encap Energy Capital Fund X, L.p. |
director, 10 percent owner |
9651 KATY FREEWAY, SUITE 600, HOUSTON TX 77024 |
| Karl F Kurz |
director |
DEVON ENERGY CORP., 333 W. SHERIDAN AVE, OKLAHOMA CITY OK 73102 |
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