Vital Energy Inc. (VTLE)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	661,560	762,135	262,038	-773,110	-283,500
Long-term debt	US$ in thousands	1,609,420	1,113,020	1,425,860	1,179,270	1,170,420
Total stockholders’ equity	US$ in thousands	2,785,260	1,110,750	513,780	-21,443	841,874
Return on total capital		15.05%	34.27%	13.51%	-66.77%	-14.09%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $661,560K ÷ ($1,609,420K + $2,785,260K)
= 15.05%

Vital Energy Inc.'s return on total capital has exhibited significant fluctuations over the past five years. In 2023, the return on total capital was 15.05%, reflecting a decrease from the previous year but still indicating a positive performance. The substantial decrease from 2022's 34.27% to 2023's 15.05% suggests a potential decline in the company's efficiency in generating returns relative to its total capital.

Furthermore, in 2021, the return on total capital stood at 13.51%, which was slightly higher than in 2020 when the company experienced a negative return of -66.77%. The negative return in 2020 indicates that the company's capital was not effectively utilized to generate profits during that period, possibly due to operational inefficiencies or external factors impacting performance.

In 2019, the return on total capital was also negative at -14.09%, signaling another period of underperformance and potential challenges in capital deployment.

Overall, Vital Energy Inc.'s return on total capital has shown a mixed performance over the years, with fluctuations highlighting the importance of effectively managing capital allocation and operational efficiency to drive sustainable profitability.