Vital Energy Inc. (VTLE)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company is managing its assets and liabilities to generate sales. Let's analyze Vital Energy Inc.'s activity ratios based on the provided data:

1. Inventory Turnover:
- In 2020, the company had a very high inventory turnover of 379.11, indicating that its inventory was sold and replenished frequently throughout the year.
- However, the turnover decreased significantly in 2021 to 32.29, suggesting a potential issue with managing inventory levels or slowing sales.
- Subsequent years show varying improvements but remain below the 2020 level, indicating ongoing fluctuations in inventory management efficiency.

2. Receivables Turnover:
- The receivables turnover in 2020 was relatively high at 8.68, indicating that the company efficiently collected payments from customers.
- There was a decline in the turnover in the following years, reaching 4.48 in 2024, indicating a possible increase in the average days sales outstanding and a longer period to collect receivables.

3. Payables Turnover:
- The data shows that payables turnover information is not available, suggesting that the company might not have a significant amount of payables relative to its purchases, or the data might be missing.

4. Working Capital Turnover:
- Similar to payables turnover, data for working capital turnover is not available, making it difficult to assess how effectively the company is utilizing its working capital to generate sales.

In conclusion, Vital Energy Inc. experienced fluctuations in inventory turnover and a decline in receivables turnover over the years, indicating potential issues with inventory management and collection of receivables. The lack of data for payables turnover and working capital turnover limits a comprehensive analysis of the company's overall efficiency in managing its working capital and supplier payments.

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Average number of days

Based on the provided data for Vital Energy Inc., we can observe the following trends in the activity ratios:

1. Days of Inventory on Hand (DOH):
- In 2020, the company held inventory for only 0.96 days, indicating efficient inventory management.
- However, this figure increased significantly to 11.30 days in 2021, suggesting a possible buildup of excess inventory.
- Subsequently, the DOH decreased to 5.10 days in 2022, then increased to 8.38 days in 2023, and finally lowered to 4.66 days in 2024.
- Overall, there were fluctuations in the DOH over the years, indicating potential changes in inventory management practices.

2. Days of Sales Outstanding (DSO):
- The DSO shows how long it takes for the company to collect revenue from sales.
- In 2020, the DSO was 42.03 days, indicating a reasonable collection period.
- However, this metric increased to 72.63 days in 2021, signaling potential issues with accounts receivable management.
- The DSO fluctuated over the following years—48.61 days in 2022, 73.23 days in 2023, and 81.51 days in 2024—suggesting variability in the company's collection efficiency.

3. Number of Days of Payables:
- The data provided does not specify the number of days of payables for Vital Energy Inc. throughout the analyzed period.
- This may indicate that the company has a policy of paying its bills promptly and does not intentionally delay payments to suppliers.

In summary, Vital Energy Inc. experienced fluctuations in its activity ratios over the years, particularly in inventory management and accounts receivable collection. Monitoring and improving these ratios can enhance the company's operational efficiency and financial performance.

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Long-term

Long-term activity ratios provide insight into Vital Energy Inc.'s efficiency in utilizing its assets over time.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures the ability of the company to generate sales revenue from its investment in fixed assets.
- The trend for Vital Energy Inc.'s fixed asset turnover has shown fluctuations over the years. In 2020, the ratio was 0.52, indicating that the company generated $0.52 in sales for every dollar invested in fixed assets. The ratio decreased to 0.36 in 2021, suggestive of a decline in efficiency. However, there was a notable improvement in 2022, with the ratio increasing to 0.62, indicating better utilization of fixed assets. Subsequently, the ratio fell to 0.34 in 2023 and remained relatively stable at 0.35 in 2024.
- Overall, the fluctuations in the fixed asset turnover ratio suggest varying levels of efficiency in utilizing fixed assets to generate sales revenues over the years.

2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently the company is utilizing all its assets to generate sales.
- The trend for Vital Energy Inc.'s total asset turnover also shows fluctuations over the years. In 2020, the ratio stood at 0.46, indicating that the company generated $0.46 in sales for every dollar of total assets. The ratio decreased to 0.32 in 2021, signaling a drop in efficiency in asset utilization. There was an improvement in 2022, with the ratio increasing to 0.55, suggesting better efficiency in generating sales from total assets. However, the ratio declined to 0.29 in 2023 and slightly increased to 0.30 in 2024.
- The fluctuations in the total asset turnover ratio indicate varying levels of efficiency in utilizing all assets to generate sales revenue over the years, albeit with some improvement in 2022 compared to the previous years.

In conclusion, while there have been fluctuations in both the fixed asset turnover and total asset turnover ratios for Vital Energy Inc., these ratios provide valuable insights into the company's efficiency in generating sales revenue from its fixed and total assets over the years. Monitoring these ratios can help assess the effectiveness of the company's asset utilization strategies and identify areas for improvement.