Vital Energy Inc. (VTLE)

Inventory turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	598,071	446,205	439,841	438,358	435,391	195,866	247,847	300,012	325,990	407,826	584,777	1,000,225	1,048,954	1,347,087	1,508,585	1,045,435	970,336	687,215	297,905	303,277
Inventory	US$ in thousands	13,723	3,775	11,942	39,109	6,070	18,990	5,174	5,899	10,160	3,272	—	—	3,196	81,129	151,704	270,686	5,484	97,844	47,167	7,610
Inventory turnover		43.58	118.20	36.83	11.21	71.73	10.31	47.90	50.86	32.09	124.64	—	—	328.21	16.60	9.94	3.86	176.94	7.02	6.32	39.85

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $598,071K ÷ $13,723K
= 43.58

Based on the inventory turnover ratios of Vital Energy Inc. over the past few quarters, it is evident that there has been significant variability in the efficiency of managing inventory. The inventory turnover ratios have fluctuated widely, ranging from as low as 3.86 times in March 2020 to as high as 328.21 times in December 2020.

In general, a high inventory turnover ratio indicates that the company is efficiently selling its inventory and restocking it quickly. A low ratio may suggest that the company is holding onto its inventory for a longer period, which could tie up valuable capital and potentially indicate inefficiencies in inventory management.

The inventory turnover ratio of Vital Energy Inc. reached a peak of 328.21 times in December 2020, indicating a very high level of efficiency in managing inventory during that period. However, this was followed by a significant drop in efficiency as the ratio fell to 3.86 times in March 2020. This sudden decline may have been influenced by various factors such as changes in demand, supply chain disruptions, or inventory management issues.

It is important for Vital Energy Inc. to monitor and analyze its inventory turnover ratios consistently to identify any trends or anomalies that could impact its overall financial performance and operational efficiency. By actively managing inventory levels and turnover, the company can optimize its working capital utilization and improve its profitability in the long run.