Vital Energy Inc. (VTLE)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,491,170	1,495,400	820,641	661,355	855,625
Property, plant and equipment	US$ in thousands	4,360,210	2,410,540	2,250,150	1,271,710	2,000,220
Fixed asset turnover		0.34	0.62	0.36	0.52	0.43

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $1,491,170K ÷ $4,360,210K
= 0.34

Fixed asset turnover is a financial ratio that measures a company's ability to generate revenue from its investment in fixed assets. Vital Energy Inc.'s fixed asset turnover has fluctuated over the past five years, ranging from 0.34 to 0.62. A lower fixed asset turnover ratio indicates that the company is generating less revenue relative to its investment in fixed assets, which could indicate underutilization or inefficiency in managing its fixed assets.

The decrease in fixed asset turnover from 0.62 in 2022 to 0.34 in 2023 may raise concerns about Vital Energy Inc.'s operational performance and efficiency in utilizing its fixed assets to generate revenue. This significant decline could imply challenges in optimizing the capacity or productivity of its fixed assets, which may impact the company's overall profitability and competitiveness in the industry.

Further analysis and investigation into the reasons behind this sharp decline in the fixed asset turnover ratio are warranted to identify potential issues and implement strategies to improve efficiency and productivity in utilizing fixed assets to enhance revenue generation for Vital Energy Inc.