Talos Energy (TALO)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.21 | 0.19 | 0.35 | 0.35 | 0.28 |
| Debt-to-capital ratio | 0.32 | 0.33 | 0.56 | 0.52 | 0.40 |
| Debt-to-equity ratio | 0.46 | 0.50 | 1.26 | 1.06 | 0.68 |
| Financial leverage ratio | 2.23 | 2.62 | 3.64 | 3.06 | 2.40 |
The solvency ratios for Talos Energy Inc provide insights into the company's ability to meet its financial obligations and the extent of its financial leverage. Looking at the trends over the past five years:
1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Talos Energy Inc has demonstrated a decreasing trend in this ratio from 2019 to 2023, suggesting that the company has gradually reduced its reliance on debt to finance its assets.
2. Debt-to-capital ratio: This ratio measures the extent to which a company is leveraged using debt to finance its operations. Talos Energy Inc's debt-to-capital ratio has shown a fluctuating trend over the past five years, with a slight dip in 2023 compared to 2022. This indicates that the company has been managing its capital structure to balance debt and equity financing.
3. Debt-to-equity ratio: The debt-to-equity ratio signifies the proportion of a company's financing that comes from debt relative to equity. Talos Energy Inc's debt-to-equity ratio has exhibited a declining trend from 2021 to 2023, showcasing a reduction in financial risk and a stronger equity position compared to debt obligations.
4. Financial leverage ratio: This ratio indicates the extent to which a company utilizes debt to finance its operations. Talos Energy Inc's financial leverage ratio has fluctuated over the past five years, with a notable decrease in 2023 compared to 2022. This implies that the company has been managing its leverage effectively, potentially reducing financial risk and enhancing solvency.
Overall, the downward trends in the debt-to-assets, debt-to-equity, and financial leverage ratios suggest that Talos Energy Inc has been working towards a more conservative and balanced financial structure. However, periodic fluctuations in the debt-to-capital ratio indicate the company's ongoing efforts to optimize its capital mix for sustainable growth and financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.73 | 4.06 | -0.39 | -3.33 | 1.23 |
The interest coverage ratio for Talos Energy Inc has fluctuated over the past five years. In 2023, the interest coverage ratio was 1.19, indicating the company's ability to cover its interest expenses with its earnings has decreased compared to the prior year. In 2022, the ratio was 5.98, showing a strong ability to cover interest expenses with earnings. In 2021, the ratio was 2.95, signaling a moderate coverage of interest expenses. However, in 2020, the company's interest coverage ratio was negative at -1.54, suggesting that the company's earnings were insufficient to cover its interest expenses. The ratio improved in 2019 to 2.30, indicating a return to a positive coverage of interest expenses. Overall, fluctuations in the interest coverage ratio should be closely monitored to assess the company's ability to meet its financial obligations.