Vital Energy Inc. (VTLE)

Vital Energy Inc.'s solvency ratios demonstrate a positive trend over the years, indicating an improvement in the company's ability to meet its long-term financial obligations. The Debt-to-assets ratio has decreased steadily from 0.82 in 2020 to 0.31 in 2023, before slightly rising to 0.42 in 2024. This indicates that the company relied less on debt financing relative to its total assets.

Similarly, the Debt-to-capital ratio has shown a declining trend, decreasing from 1.02 in 2020 to 0.37 in 2023, with a slight increase to 0.48 in 2024. This suggests that the company reduced its dependency on debt to finance its operations compared to its total capital structure.

The Debt-to-equity ratio, although not available for 2020, shows a significant decrease from 2.78 in 2021 to 0.58 in 2023, before rising slightly to 0.91 in 2024. This decline indicates a lower reliance on debt relative to equity in funding the company's operations over the years.

Furthermore, the Financial leverage ratio, also unavailable for 2020, has exhibited a downward trend from 4.97 in 2021 to 1.85 in 2023, before increasing to 2.18 in 2024. This implies that Vital Energy Inc. has been reducing its financial leverage and moving towards a more balanced capital structure.

Overall, Vital Energy Inc.'s solvency ratios demonstrate an improving financial position with better debt management and a strengthened ability to fulfill its long-term financial commitments.

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Coverage ratios

Vital Energy Inc.'s interest coverage ratio has been fluctuating over the past five years. In December 2020, the company had an interest coverage ratio of -7.36, indicating that its earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses, which may raise concerns about its ability to meet its debt obligations. However, by December 2021, the ratio improved to 2.31, suggesting that the company's earnings were able to cover its interest payments.

The interest coverage ratio continued to improve in December 2022, reaching 6.09, indicating a stronger ability to meet interest obligations. In December 2023, the ratio slightly decreased to 4.42, but it still remained at a level that indicates comfortable coverage of interest expenses.

However, in December 2024, the interest coverage ratio plummeted to -0.24, which implies that the company's EBIT was insufficient to cover its interest payments. This significant decline raises concerns about the company's financial health and its ability to service its debt.

Overall, Vital Energy Inc.'s interest coverage has shown variability over the years, with both improvements and declines. Investors and creditors should closely monitor this ratio to gauge the company's ability to meet its interest obligations in the future.