Vital Energy Inc. (VTLE)

Return on total capital

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands -43,467 661,560 762,135 262,038 -773,110
Long-term debt US$ in thousands 2,454,240 1,609,420 1,113,020 1,425,860 1,179,270
Total stockholders’ equity US$ in thousands 2,700,570 2,785,260 1,110,750 513,780 -21,443
Return on total capital -0.84% 15.05% 34.27% 13.51% -66.77%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-43,467K ÷ ($2,454,240K + $2,700,570K)
= -0.84%

Vital Energy Inc.'s return on total capital has undergone significant fluctuations in recent years. The ratio was notably negative at -66.77% as of December 31, 2020, indicating that the company was not efficiently utilizing its capital to generate returns. However, there was a notable improvement in the following years, with the return on total capital increasing to 13.51% as of December 31, 2021, and further improving to 34.27% by December 31, 2022.

In 2023, the return on total capital dipped slightly to 15.05%, suggesting a potential slowdown in the company's capital efficiency. Furthermore, as of December 31, 2024, the return on total capital turned negative again, albeit to a lesser extent at -0.84%. This negative figure could signify that the company's capital investments are not yielding adequate returns, warranting further investigation into the factors contributing to this decline.

Overall, Vital Energy Inc.'s return on total capital has shown a mix of positive and negative trends over the years, highlighting the importance of monitoring capital efficiency to ensure sustainable and profitable operations.