Texas Pacific Land Trust (TPL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Inventory turnover | 17.15 | 0.66 | 0.60 | 0.52 |
| Receivables turnover | — | — | — | — |
| Payables turnover | — | — | — | — |
| Working capital turnover | 0.77 | 1.12 | 0.95 | 0.97 |
The inventory turnover ratio for Texas Pacific Land Trust has shown a significant improvement over the years, increasing from 0.52 in 2020 to 17.15 in 2023. This indicates that the company is efficiently managing its inventory and converting it into sales at a faster rate.
However, information on receivables turnover and payables turnover is not available, making it challenging to assess the effectiveness of the company in managing its receivables and payables.
The working capital turnover ratio has slightly decreased over the years, going from 0.97 in 2020 to 0.77 in 2023. This suggests that the company is generating slightly less revenue for each dollar of working capital employed. Monitoring this ratio closely can help in understanding the efficiency of utilizing working capital to generate revenue.
Overall, the inventory turnover ratio demonstrates the company's ability to efficiently manage inventory, which could positively impact its profitability. Further insights could be drawn by analyzing additional activity ratios such as receivables and payables turnover ratios if data becomes available in the future.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 21.28 | 554.48 | 612.22 | 705.44 |
| Days of sales outstanding (DSO) | days | — | — | — | — |
| Number of days of payables | days | — | — | — | — |
The data provided represents Texas Pacific Land Trust's activity ratios for the years 2020 to 2023. In terms of Days of Inventory on Hand (DOH), the company has shown a significant improvement over the years, reducing the number of days it takes to sell its inventory from 705.44 days in 2020 to 21.28 days in 2023. This indicates a more efficient management of inventory levels.
Unfortunately, information on Days of Sales Outstanding (DSO) and Number of Days of Payables is not available for any of the years provided. DSO would have provided insights into how long it takes for the company to collect revenue from its sales, while the Number of Days of Payables would have shown how long the company takes to pay its suppliers. Without this data, a full analysis of Texas Pacific Land Trust's complete working capital cycle is not possible.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Fixed asset turnover | 7.05 | 7.81 | 5.66 | 3.82 |
| Total asset turnover | 0.55 | 0.76 | 0.59 | 0.53 |
The fixed asset turnover ratio for Texas Pacific Land Trust has shown a declining trend over the past four years, indicating that the company generated $7.05 in revenue for every dollar invested in fixed assets in 2023, down from $7.81 in 2022. This may suggest that the company's fixed assets are being utilized less efficiently in generating sales.
On the other hand, the total asset turnover ratio has also decreased over the same period, with the company generating $0.55 in revenue for every dollar invested in total assets in 2023, compared to $0.76 in 2022. This implies that the overall efficiency of the company in utilizing its total assets to generate revenue has deteriorated.
Overall, the declining trend in both fixed asset turnover and total asset turnover ratios may indicate that Texas Pacific Land Trust's asset management efficiency has worsened over the past four years. It is essential for the company to address this decline in efficiency to improve its long-term financial performance and profitability.