Vital Energy Inc. (VTLE)

Liquidity ratios

	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
Current ratio	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	1.17	1.54	1.13	0.85
Quick ratio	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	0.90	0.78	0.78	0.75
Cash ratio	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	0.24	0.22	0.33	0.22

Vital Energy Inc.'s liquidity ratios show varying levels of liquidity over the provided periods. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, ranged from a low of 0.34 to a high of 2.30. A current ratio above 1 indicates that the company has more current assets than current liabilities available to cover its short-term obligations. The company experienced fluctuating current ratios, possibly indicating inconsistent management of current assets and liabilities.

The quick ratio gives a more stringent assessment of liquidity by excluding inventory from current assets. Vital Energy Inc.'s quick ratio ranged from 0.30 to 1.38. A quick ratio above 1 suggests that the company can meet its short-term liabilities without relying on the sale of inventory. While the quick ratio generally follows the trend of the current ratio, it provides a clearer picture of the company's immediate liquidity position.

The cash ratio provides the most conservative view of liquidity as it only considers cash and cash equivalents to cover current liabilities. Vital Energy Inc.'s cash ratio fluctuated between 0.02 and 1.03, indicating a wide range in the company's ability to cover its short-term obligations with cash on hand. A higher cash ratio is generally preferred as it signifies a stronger ability to settle current debts without relying on the conversion of other assets into cash.

Overall, Vital Energy Inc.'s liquidity ratios show a mixed performance over the periods provided, suggesting the need for closer monitoring of the company's liquidity management to ensure it can meet its short-term obligations effectively.

Additional liquidity measure

		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
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

The cash conversion cycle of Vital Energy Inc. has shown fluctuations over the periods analyzed. The cash conversion cycle is a measure of how long it takes for a company to convert its investment in inventory and other resources into cash flows from sales.

The company's cash conversion cycle ranged from a low of 33.30 days in March 2021 to a high of 116.62 days in March 2020. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital and convert its inventory and receivables into cash more quickly.

The trend of the cash conversion cycle over the periods indicates variations in the company's ability to manage its working capital efficiently. A decreasing trend in the cash conversion cycle can be beneficial as it signifies that the company is improving its cash flow management and operating efficiency. Conversely, an increasing trend may indicate potential issues with inventory management, collections from customers, or payment to suppliers.

It is important for Vital Energy Inc. to closely monitor its cash conversion cycle and implement strategies to optimize working capital management, such as improving inventory turnover, enhancing accounts receivable collection processes, and negotiating favorable payment terms with suppliers. By effectively managing its cash conversion cycle, the company can enhance its liquidity position and overall financial performance.