Vital Energy Inc. (VTLE)

Return on assets (ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	-173,521	695,078	631,512	145,008	-874,173
Total assets	US$ in thousands	5,878,950	5,149,580	2,726,110	2,551,820	1,442,610
ROA		-2.95%	13.50%	23.17%	5.68%	-60.60%

December 31, 2024 calculation

ROA = Net income ÷ Total assets
= $-173,521K ÷ $5,878,950K
= -2.95%

Return on assets (ROA) is a key financial ratio that indicates how efficiently a company is utilizing its assets to generate profit. In the case of Vital Energy Inc., the trend in ROA over the past five years shows some fluctuations.

- In December 31, 2020, the ROA was very low at -60.60%, indicating that the company was experiencing significant challenges in generating profit relative to its total assets.
- By December 31, 2021, there was a notable improvement in ROA, with a positive rate of 5.68%, suggesting that the company's profitability relative to its assets had started to recover.
- The trend continued to improve significantly by December 31, 2022, with a ROA of 23.17%, indicating that Vital Energy Inc. was efficiently utilizing its assets to generate profits.
- However, in December 31, 2023, there was a slight decrease in ROA to 13.50%, suggesting a dip in the company's profitability efficiency compared to the previous year.
- By December 31, 2024, the company experienced a negative ROA of -2.95%, signaling a decline in profitability relative to its assets, indicating potential challenges or inefficiencies in asset utilization.

Overall, Vital Energy Inc. has shown varying levels of efficiency in generating profits from its assets over the years, with notable improvements followed by periods of decline. It is essential for the company to focus on consistently improving its ROA to ensure sustainable profitability and efficient asset management in the long term.