Vital Energy Inc. (VTLE)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	8.38	3.09	9.91	32.56	5.09	35.39	7.62	7.18	11.38	2.93	—	—	1.11	21.98	36.70	94.51	2.06	51.97	57.79	9.16
Days of sales outstanding (DSO)	days	73.23	60.93	35.66	32.62	48.62	36.27	55.33	82.20	70.60	79.64	80.59	52.65	32.19	24.63	23.59	22.12	44.42	32.51	31.77	44.56
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	81.60	64.02	45.57	65.18	53.71	71.66	62.95	89.37	81.97	82.57	80.59	52.65	33.30	46.61	60.30	116.62	46.48	84.48	89.56	53.72

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.38 + 73.23 – —
= 81.60

The cash conversion cycle of Vital Energy Inc. has displayed fluctuations over the past few quarters. The company's cash conversion cycle, which represents the time it takes to convert its investments in inventory and other resources into cash received from sales, ranged from as low as 33.30 days in March 2021 to as high as 116.62 days in March 2020.

In recent quarters, the cash conversion cycle has been relatively stable, with values ranging between 45.57 days and 81.60 days. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital and convert investments into cash faster. On the other hand, a higher cash conversion cycle may suggest inefficiencies in inventory management, collection of receivables, or payment of payables.

It is important for Vital Energy Inc. to closely monitor and manage its cash conversion cycle to optimize its working capital and liquidity. Analyzing the components of the cash conversion cycle, such as days inventory outstanding, days sales outstanding, and days payables outstanding, can provide insights into the company's operational efficiency and financial health.