Vital Energy Inc. (VTLE)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	1,352,920	598,071	434,372	328,054	1,211,620
Inventory	US$ in thousands	17,289	13,723	6,070	10,160	3,196
Inventory turnover		78.25	43.58	71.56	32.29	379.11

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,352,920K ÷ $17,289K
= 78.25

Vital Energy Inc.'s inventory turnover has demonstrated fluctuations over the past five years. In 2020, the company's inventory turnover was exceptionally high at 379.11 times, indicating that the company sold and replaced its entire inventory approximately 379 times during that year. This could be viewed as a positive sign of efficient inventory management.

However, in 2021, the inventory turnover ratio saw a significant decline to 32.29 times, suggesting a slowdown in inventory movement compared to the previous year. This could indicate potential issues such as overstocking, slower sales, or ineffective inventory management practices that need to be addressed.

In 2022, the inventory turnover improved to 71.56 times, showing a positive recovery from the previous year's dip. This suggests that the company may have taken steps to enhance its inventory management processes and optimize the flow of goods.

The following year, in 2023, the inventory turnover ratio decreased again to 43.58 times, indicating a decrease in the efficiency of inventory turnover compared to the previous year. This decline may warrant further investigation into the factors impacting inventory turnover within the company.

Lastly, in 2024, the inventory turnover ratio increased to 78.25 times, reflecting an improvement in inventory management efficiency with the company selling and replacing its inventory approximately 78 times during that year. This rebound could be a positive sign of enhanced operational performance and effective inventory control measures.

Overall, Vital Energy Inc.'s inventory turnover ratio has displayed variability over the past five years, highlighting the importance of ongoing monitoring and adjustment of inventory management practices to ensure optimal efficiency and profitability.