Talos Energy (TALO)

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	299,880	509,950	-51,449	-330,607	120,435
Long-term debt	US$ in thousands	992,614	585,340	956,667	985,512	732,981
Total stockholders’ equity	US$ in thousands	2,155,150	1,165,580	760,653	926,601	1,078,280
Return on total capital		9.53%	29.12%	-3.00%	-17.29%	6.65%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $299,880K ÷ ($992,614K + $2,155,150K)
= 9.53%

Talos Energy Inc's return on total capital has fluctuated significantly over the past five years. In 2023, the return on total capital was 6.49%, representing a decrease from the previous year's exceptionally high return of 42.85% in 2022. The return on total capital was also positive in 2021 at 22.79%, indicating strong performance. However, in 2020, the company experienced a negative return on total capital of -8.02%, which may signal potential financial challenges or inefficiencies that impacted the company's profitability. Prior to this downturn, in 2019, the return on total capital was a positive 12.44%, suggesting a moderate level of profitability.

Overall, Talos Energy Inc's return on total capital has been inconsistent, with significant fluctuations in performance over the past five years. It is essential for the company to closely monitor and address factors influencing these fluctuations to sustain and improve its profitability and operational efficiency.