Talos Energy (TALO)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.24 | 2.23 | 2.62 | 3.64 | 3.06 |
The solvency ratios for Talos Energy indicate a very strong financial position in terms of leverage and debt management. The debt-to-assets, debt-to-capital, and debt-to-equity ratios all stand at 0.00 across multiple years, suggesting that the company has no debt relative to its assets, capital, or equity. This signifies that Talos Energy relies more on equity financing rather than debt to fund its operations or investments.
Furthermore, the financial leverage ratio, which measures the extent to which a company is using debt to finance its operations, shows a decreasing trend over the years. Starting at 3.06 in 2020 and decreasing to 2.24 in 2024, this indicates a decreasing reliance on debt financing and a strengthening equity position.
Overall, the solvency ratios of Talos Energy paint a picture of a company with a conservative debt management strategy and a strong financial base, positioning it well to navigate potential challenges and capitalize on growth opportunities in the future.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 0.62 | 1.05 | 3.95 | -0.39 | -3.33 |
The interest coverage ratio measures a company's ability to meet its interest payment obligations on its outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expenses.
In the case of Talos Energy:
- As of December 31, 2020, the interest coverage ratio was -3.33, indicating that the company's EBIT was insufficient to cover its interest payments, raising concerns about financial health.
- By the end of 2021, the interest coverage ratio deteriorated further to -0.39, reflecting a worsening ability to cover interest expenses.
- However, the situation improved significantly by December 31, 2022, with an interest coverage ratio of 3.95, suggesting that the company's EBIT was almost four times its interest expenses, a positive sign.
- As of December 31, 2023, the interest coverage ratio stood at 1.05, indicating that Talos Energy generated just enough EBIT to cover its interest payments.
- By December 31, 2024, the interest coverage ratio declined to 0.62, signaling a decrease in the company's ability to cover its interest expenses with its EBIT.
Overall, the trend in Talos Energy's interest coverage ratio shows fluctuations, with significant improvements in 2022 but subsequent declines, indicating varying levels of financial stability and the need for monitoring and potential financial management adjustments going forward.