Talos Energy (TALO)

Return on total capital

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	110,238	181,179	58,089	71,282	257,179	268,886	517,585	661,915	523,762	610,255	342,947	39,340	-12,068	-517,210	-584,198	-656,297	-322,646	15,188	169,376	458,761
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	2,759,700	2,817,640	2,726,320	2,752,180	2,155,150	2,062,060	2,061,890	2,060,840	1,165,580	1,155,340	897,510	695,125	760,653	674,624	686,421	807,154	926,601	1,282,280	1,294,550	1,394,900
Return on total capital		3.99%	6.43%	2.13%	2.59%	11.93%	13.04%	25.10%	32.12%	44.94%	52.82%	38.21%	5.66%	-1.59%	-76.67%	-85.11%	-81.31%	-34.82%	1.18%	13.08%	32.89%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $110,238K ÷ ($—K + $2,759,700K)
= 3.99%

Talos Energy's return on total capital has exhibited significant fluctuations over the period ranging from March 31, 2020, to December 31, 2024. The ratio started on a high note at 32.89% in March 2020 but experienced a sharp decline to -85.11% by June 30, 2021. This negative trend continued until it hit a low point of -81.31% in March 31, 2021, reflecting challenges in generating returns relative to its total capital investment.

However, there was a noticeable improvement in the company's performance from June 30, 2022, onwards, with the return on total capital steadily increasing. The ratio surpassed 50% by September 30, 2022, indicating a strong recovery and enhanced efficiency in capital utilization. Notably, Talos Energy achieved its peak return on total capital of 52.82% in September 30, 2022, reflecting a commendable performance in maximizing profitability relative to the total capital employed.

Despite some fluctuations in the subsequent periods, the return on total capital generally remained positive, fluctuating between 2% to 44.94%, showcasing a more stable financial performance compared to the earlier periods of negative returns. Overall, Talos Energy demonstrated an ability to enhance its returns on total capital, indicating improved operational effectiveness and efficiency in resource allocation leading to increased profitability.