Texas Pacific Land Trust (TPL)

Working capital turnover

		Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	659,375	631,595	617,644	650,788	666,449	667,422	661,894	594,476	514,138	450,958	378,084
Total current assets	US$ in thousands	963,828	862,464	790,858	737,530	711,006	633,401	589,187	523,936	618,840	526,513	458,108	398,230	375,847	332,530
Total current liabilities	US$ in thousands	70,871	44,387	47,370	44,884	61,037	39,595	43,599	57,073	67,279	50,900	29,102	21,810	33,848	21,376
Working capital turnover		0.74	0.77	0.83	0.94	1.03	1.12	1.21	1.27	0.93	0.95	0.88

March 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $659,375K ÷ ($963,828K – $70,871K)
= 0.74

The working capital turnover for Texas Pacific Land Trust has exhibited some fluctuation over the past few quarters. The ratio indicates how efficiently the company is utilizing its working capital to generate revenue. A decreasing trend in the working capital turnover may suggest that the company is becoming less efficient in utilizing its current assets to support its operations and sales.

From December 2020 to March 2021, the working capital turnover increased significantly from 0.88 to 1.03, indicating a more efficient use of working capital to generate revenue. However, this trend reversed from June 2021 to March 2022, with the ratio declining steadily. This downward trend continued until March 2024, where the working capital turnover stood at 0.74.

A working capital turnover below 1 may indicate that the company is not efficiently using its current assets to support its sales and operations. Therefore, Texas Pacific Land Trust may need to reassess its working capital management strategies to improve efficiency and maximize the utilization of its current assets.