Texas Pacific Land Trust (TPL)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Revenue | US$ in thousands | 631,595 | 667,422 | 450,958 | 302,554 |
| Total current assets | US$ in thousands | 862,464 | 633,401 | 526,513 | 332,530 |
| Total current liabilities | US$ in thousands | 44,387 | 39,595 | 50,900 | 21,376 |
| Working capital turnover | 0.77 | 1.12 | 0.95 | 0.97 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $631,595K ÷ ($862,464K – $44,387K)
= 0.77
The working capital turnover for Texas Pacific Land Trust has fluctuated over the past four years. In 2023, it stood at 0.77, indicating that the company generated approximately $0.77 in revenue for every dollar of working capital invested. This represents a decrease from the previous year when the ratio was 1.12.
While a higher working capital turnover ratio generally suggests efficient utilization of working capital to generate revenue, the decreasing trend observed over the past two years may indicate potential inefficiencies in managing working capital or a decline in sales relative to working capital. Further analysis and comparison with industry benchmarks would be beneficial to understand the company's performance in this aspect.