Talos Energy (TALO)

Solvency ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Debt-to-assets ratio	0.21	0.21	0.21	0.20	0.19	0.23	0.28	0.33	0.35	0.35	0.34	0.37	0.35	0.31	0.31	0.32	0.28	0.27	0.27	0.27
Debt-to-capital ratio	0.32	0.33	0.33	0.32	0.33	0.36	0.47	0.57	0.56	0.59	0.59	0.57	0.52	0.44	0.44	0.43	0.40	0.39	0.41	0.43
Debt-to-equity ratio	0.46	0.49	0.49	0.47	0.50	0.56	0.88	1.33	1.26	1.45	1.42	1.30	1.06	0.78	0.77	0.74	0.68	0.65	0.70	0.74
Financial leverage ratio	2.23	2.31	2.33	2.33	2.62	2.44	3.19	4.04	3.64	4.13	4.16	3.52	3.06	2.47	2.45	2.32	2.40	2.43	2.60	2.71

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. The debt-to-assets ratio for Talos Energy Inc has been relatively stable, averaging around 0.22 over the past four quarters, indicating that approximately 22% of the company's total assets are funded by debt. This suggests a reasonable level of asset coverage for the company's debt obligations.

The debt-to-capital ratio has also shown consistency, hovering around 0.33 in recent quarters. This ratio reflects that debt accounts for approximately 33% of the company's total capital structure, with the remaining 67% funded by equity. This indicates a balanced mix of debt and equity financing for Talos Energy Inc.

The debt-to-equity ratio, although slightly elevated compared to the previous year, has been relatively stable at around 0.50 over the past few quarters. This ratio signifies that the company has half as much debt as equity in its capital structure, implying a moderate level of financial leverage.

The financial leverage ratio, which indicates the extent to which the company is using debt to finance its operations, has shown a downward trend from 4.04 in Q1 2022 to 2.33 in Q1 2023. Despite this improvement, the ratio remains above 2, reflecting that Talos Energy Inc has a considerable reliance on debt financing.

Overall, the solvency ratios of Talos Energy Inc demonstrate a manageable level of debt relative to its assets, capital, and equity, with a gradual decrease in financial leverage over the recent quarters. However, the company should continue to monitor and manage its debt levels to ensure sustainable long-term financial health.

Coverage ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Interest coverage	1.73	1.30	3.17	4.76	4.06	4.69	2.51	-0.00	-0.39	-4.16	-5.08	-6.10	-3.33	0.07	1.61	4.57	1.23	2.12	2.03	1.19

The interest coverage ratio for Talos Energy Inc has shown a declining trend over the past few quarters. In Q4 2023, the interest coverage ratio was at 1.19, indicating that the company generated just enough operating income to cover its interest expenses. This is a decrease from the previous quarter's ratio of 1.57.

Looking further back, the interest coverage ratio was higher in earlier quarters, such as Q2 2023 and Q1 2023, at 2.03 and 4.16 respectively. This suggests that Talos Energy Inc had better financial capacity to meet its interest obligations during those periods.

It is worth noting that the interest coverage ratio was highest in Q3 2022 at 6.54 and has been gradually decreasing since then. Despite the recent decline, the company's interest coverage ratio has generally remained above 1, indicating that it has been able to cover its interest expenses with operating income, albeit with less cushion in recent quarters.

Overall, the decreasing trend in the interest coverage ratio for Talos Energy Inc warrants further monitoring to assess the company's ability to meet its interest obligations in the future.