Vital Energy Inc. (VTLE)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		43.58	71.56	32.29	379.11	177.31
DOH	days	8.38	5.10	11.30	0.96	2.06

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 43.58
= 8.38

The Days of Inventory on Hand (DOH) measures the average number of days a company holds its inventory before selling it. A lower DOH value indicates better efficiency in managing inventory levels, while a higher value suggests slower inventory turnover.

Looking at Vital Energy Inc.'s historical DOH, we observe fluctuations over the years:

- In 2023, the DOH increased to 8.38 days from 5.10 days in 2022, signaling a potential slowdown in inventory turnover. This could indicate excess inventory levels or challenges in selling products efficiently.

- The DOH surged to 11.30 days in 2021 from 0.96 days in 2020, indicating a significant increase in the time it takes to convert inventory into sales. This could be a red flag, suggesting potential issues such as overstocking or declining sales.

- In 2020, the DOH was exceptionally low at 0.96 days, indicating a rapid turnover of inventory. This could be a positive sign of effective inventory management or strong demand for Vital Energy Inc.'s products.

- The DOH was 2.06 days in 2019, slightly higher than in 2020 but still relatively low. This suggests that the company was able to efficiently manage its inventory levels and convert inventory into sales within a short period.

Overall, Vital Energy Inc. should closely monitor its inventory management practices and strive to find a balance between maintaining adequate inventory levels to meet demand and avoiding excessive stock that could lead to obsolescence or reduced profitability.