Vital Energy Inc. (VTLE)

Solvency ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Debt-to-assets ratio	0.42	0.39	0.32	0.37	0.31	0.44	0.42	0.40	0.41	0.42	0.45	0.52	0.56	0.60	0.73	0.78	0.82	0.77	0.67	2.37
Debt-to-capital ratio	0.48	0.44	0.37	0.43	0.37	0.52	0.50	0.49	0.50	0.54	0.66	0.77	0.74	0.86	1.13	1.06	1.02	0.90	0.77	0.58
Debt-to-equity ratio	0.91	0.80	0.59	0.75	0.58	1.09	1.01	0.95	1.00	1.18	1.90	3.36	2.78	6.02	—	—	—	8.61	3.35	1.37
Financial leverage ratio	2.18	2.05	1.86	2.02	1.85	2.50	2.38	2.40	2.45	2.80	4.23	6.43	4.97	10.08	—	—	—	11.17	4.97	0.58

Based on the provided data for Vital Energy Inc., the solvency ratios provide insights into the company's ability to meet its financial obligations in the long term.

1. Debt-to-Assets Ratio: This ratio measures the proportion of a company's total assets that are financed by debt. From March 31, 2020, to December 31, 2024, the debt-to-assets ratio steadily declined from 2.37 to 0.42. This indicates that Vital Energy Inc. became more efficient in managing its debt relative to its total assets over this period.

2. Debt-to-Capital Ratio: The debt-to-capital ratio indicates the proportion of a company's capital that comes from debt. The trend for Vital Energy Inc. in this ratio shows fluctuations from 0.58 in March 2020 to 0.48 in December 31, 2024. Overall, the company's reliance on debt to finance its operations decreased slightly over the period.

3. Debt-to-Equity Ratio: This ratio compares a company's total debt to its shareholder equity, reflecting the leverage a company is using to finance its assets. The debt-to-equity ratio for Vital Energy Inc. fluctuated significantly, hitting a high of 8.61 in September 30, 2020, and decreasing to 0.91 by December 31, 2024. This indicates a reduction in the level of financial risk associated with debt financing.

4. Financial Leverage Ratio: The financial leverage ratio shows how much the company's assets are funded by debt, indicating the level of financial risk. Vital Energy Inc. saw fluctuations in this ratio, starting at 0.58 in March 31, 2020, and ending at 2.18 in December 31, 2024. The increase implies that the company became more leveraged over the period.

In conclusion, Vital Energy Inc. demonstrated improved solvency and financial stability over the analyzed period, as indicated by decreasing debt-to-assets and debt-to-equity ratios. However, the financial leverage ratio showed an increase, suggesting a higher level of financial risk. It is important for the company to maintain a balance between leveraging debt for growth and managing financial risk effectively.

Coverage ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Interest coverage	-1.17	3.06	2.83	2.91	4.42	3.47	6.37	7.93	6.09	6.77	5.26	2.14	2.31	-1.15	-4.85	-8.73	-7.36	-9.21	-10.99	-2.64

The interest coverage ratio for Vital Energy Inc. has shown significant fluctuation over the past few years, indicating variations in the company's ability to cover its interest obligations. The ratio was negative in the initial quarters of 2020, implying that the company's earnings were insufficient to cover its interest expenses during that period.

However, there has been a gradual improvement in the interest coverage ratio from the end of 2021 onwards, with the ratio turning positive by the end of December 2021. This positive trend indicates that the company's earnings have become more sufficient to cover its interest costs.

The interest coverage ratio continued to improve through 2022 and 2023, reaching its peak in March 2024. This upward trend demonstrates a strengthening financial position for Vital Energy Inc., as higher interest coverage ratios suggest improved financial stability and lower default risk.

While there was a slight decline in the interest coverage ratio in the latter half of 2024, it remained positive overall. It is important for investors and creditors to monitor this ratio closely to assess the company's ability to meet its interest obligations and manage its debt effectively.