Talos Energy (TALO)

Talos Energy's liquidity ratios have shown some improvement over the years based on the provided data. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has increased from 0.55 in December 2020 to 0.91 by the end of December 2024. This indicates that the company has strengthened its ability to cover its current liabilities over the years.

In contrast, the quick ratio, also known as the acid-test ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has fluctuated over the same period. The ratio improved from 0.08 in December 2020 to 0.15 in December 2024, showing some variability.

Further, the cash ratio, which indicates how well a company can cover its short-term liabilities with its most liquid assets (cash and cash equivalents), has followed a similar trend as the quick ratio. It increased from 0.08 in December 2020 to 0.15 by December 2024, showing an overall positive trajectory.

Overall, Talos Energy's liquidity position has improved over the years, as evidenced by the upward trend in the current ratio and the increase in the quick ratio and cash ratio, albeit with some fluctuations along the way. It suggests that the company has enhanced its ability to meet its short-term obligations and has sufficient liquid assets to support its operations.

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Additional liquidity measure

The cash conversion cycle of Talos Energy has shown fluctuations over the years based on the provided data.

- As of December 31, 2020, the cash conversion cycle stood at 21.57 days, indicating that it took the company approximately 21.57 days to convert its investments in inventory and other resources into cash receipts.
- By December 31, 2021, the cash conversion cycle increased to 26.19 days, suggesting a longer period for Talos Energy to complete the cash cycle.
- There was a significant improvement by December 31, 2022, with the cash conversion cycle reducing to 12.84 days, signifying a more efficient management of working capital.
- Notably, as of December 31, 2023 and 2024, the cash conversion cycle was reported as 0.00 days, which may indicate that Talos Energy managed to streamline its operations to the extent that cash was received almost immediately after the company's investments.

Overall, the trend in the cash conversion cycle for Talos Energy reflects a mix of fluctuations and improvements, showing the company's ability to effectively manage its working capital and convert investments into cash receipts more efficiently over the years.