Talos Energy (TALO)

Financial leverage ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total assets	US$ in thousands	6,191,800	4,816,310	3,058,630	2,766,820	2,834,550
Total stockholders’ equity	US$ in thousands	2,759,700	2,155,150	1,165,580	760,653	926,601
Financial leverage ratio		2.24	2.23	2.62	3.64	3.06

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,191,800K ÷ $2,759,700K
= 2.24

The financial leverage ratio, which measures the extent to which a company relies on debt to finance its operations, shows a fluctuating trend in the case of Talos Energy over the years.

As of December 31, 2020, the financial leverage ratio stood at 3.06, indicating that Talos Energy had $3.06 in debt for every $1 of equity. This suggests a relatively high level of leverage at the end of 2020.

By December 31, 2021, the financial leverage ratio increased to 3.64, signifying a further rise in debt relative to equity. This could imply increasing financial risk for the company as it becomes more reliant on borrowed funds.

However, the trend shifts in the subsequent years. As of December 31, 2022, the financial leverage ratio decreased to 2.62, and by December 31, 2023, it fell even lower to 2.23. These declines indicate a reduction in the company's reliance on debt financing and a strengthening of its equity position.

By December 31, 2024, the financial leverage ratio remained relatively stable at 2.24, suggesting that Talos Energy has maintained a balanced capital structure with a reasonable mix of debt and equity.

Overall, the fluctuating trend in the financial leverage ratio for Talos Energy indicates varying levels of leverage and debt management over the years, with a potential shift towards a more conservative financing approach in the later years of the analyzed period.