Vital Energy Inc. (VTLE)

Liquidity ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Current ratio	0.78	0.67	0.51	1.22	0.62	1.42	0.56	0.59	0.59	0.47	0.47	0.39	0.45	0.34	0.62	0.47	0.69	1.39	1.62	2.30
Quick ratio	0.72	0.39	0.46	1.17	0.53	1.38	0.50	0.45	0.59	0.40	0.44	0.36	0.42	0.30	0.58	0.38	0.63	0.70	0.54	0.75
Cash ratio	0.07	0.04	0.09	0.69	0.02	1.03	0.17	0.07	0.11	0.09	0.18	0.08	0.11	0.09	0.40	0.15	0.25	0.28	0.10	0.34

The liquidity ratios of Vital Energy Inc. provide insights into the company's ability to meet its short-term obligations.

1. Current Ratio: The company's current ratio has fluctuated over the evaluation period but has generally seen a downward trend. It decreased from a high of 2.30 on March 31, 2020, to a low of 0.34 on September 30, 2021. The ratio has improved since then, reaching 1.22 on March 31, 2024. A current ratio below 1 indicates potential liquidity issues, but the company managed to bring it back above 1 in recent periods, indicating a better ability to cover short-term obligations.

2. Quick Ratio: The quick ratio, or acid-test ratio, which is a more stringent measure of liquidity than the current ratio, also exhibited fluctuations but generally followed a similar pattern as the current ratio. It dropped to a low of 0.30 on September 30, 2021, but then improved to 1.17 on March 31, 2024. The ratio above 1 on the latest date suggests the company has an adequate level of highly liquid assets to cover its short-term liabilities.

3. Cash Ratio: The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, varied significantly over the evaluation period. The ratio was below 0.1 for several periods but notably increased to 1.03 on September 30, 2023, indicating a strong cash position at that time. However, it decreased to 0.07 on March 31, 2024. A higher cash ratio demonstrates the company's ability to cover its current liabilities solely with its cash holdings.

Overall, Vital Energy Inc. has experienced fluctuations in its liquidity ratios, with some periods showing potential challenges in meeting short-term obligations. However, the recent improvement in these ratios suggests a better liquidity position, particularly with the increase in the quick and cash ratios. Management should continue to monitor and manage liquidity to ensure the company can meet its financial obligations effectively.

Additional liquidity measure

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cash conversion cycle	days	88.24	40.83	51.81	74.20	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

Vital Energy Inc.'s cash conversion cycle shows fluctuations over the periods analyzed.

The company's cash conversion cycle decreased from 116.62 days on March 31, 2020, to a low of 33.30 days on December 31, 2020, indicating an improvement in the efficiency of its working capital management. Thereafter, the cycle increased gradually, reaching 89.37 days on March 31, 2022.

During the subsequent periods, the cash conversion cycle fluctuated within a range, with values varying between approximately 40 to 80 days. Notably, on September 30, 2024, the cycle decreased to 40.83 days, the lowest point since the end of 2020.

Overall, although there were fluctuations, Vital Energy Inc. demonstrated some ability to manage its cash conversion cycle effectively, with periods of efficiency followed by slight increases in the cycle duration. The company should continue monitoring and managing this cycle to ensure optimal working capital management in the future.