Vital Energy Inc. (VTLE)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	559,621	1,060,160	712,963	-861,970	-408,591
Total assets	US$ in thousands	5,149,580	2,726,110	2,551,820	1,442,610	2,264,440
Operating ROA		10.87%	38.89%	27.94%	-59.75%	-18.04%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $559,621K ÷ $5,149,580K
= 10.87%

Operating return on assets (operating ROA) is a key financial ratio that indicates how efficiently a company utilizes its assets to generate operating income. Vital Energy Inc.'s operating ROA has fluctuated over the past five years. In 2023, the operating ROA was 10.87%, showing a decrease from the previous year's level of 38.89%. This decline suggests that the company's ability to generate operating income from its assets weakened during the year.

Comparing the current operating ROA to earlier years reveals a mixed performance. In 2022 and 2021, Vital Energy Inc. demonstrated strong operating ROA levels of 38.89% and 27.94%, respectively, indicating efficient asset utilization and healthy operating income generation. However, in 2020 and 2019, the company experienced negative operating ROA figures of -59.75% and -18.04%, respectively, signaling that the company struggled to generate operating income from its assets during those periods.

Overall, Vital Energy Inc. should review its asset management and operational efficiency strategies to enhance its operating ROA and improve profitability in the future, considering the fluctuating performance in recent years.