Texas Pacific Land Trust (TPL)
Cash conversion cycle
| Dec 31, 2024 | 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 | — | — | — | — | — |
| Cash conversion cycle | days | 0.00 | 21.28 | 554.48 | 612.22 | 705.44 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
The cash conversion cycle of Texas Pacific Land Trust has shown a declining trend from 705.44 days as of December 31, 2020, to 0.00 days as of December 31, 2024. This indicates that the company has been able to more efficiently convert its resources into cash over the years. The substantial reduction in the cash conversion cycle suggests that the company has improved its management of working capital, reducing the time it takes to generate cash from its operations.
The significant decrease in the cash conversion cycle from 2020 to 2024 reflects improved efficiency in the company's operations, potentially through better inventory management, quicker collection of receivables, and extended payment terms to suppliers. The reduction to zero days by the end of 2024 could imply that the company has optimized its working capital to the extent that it can convert its resources into cash almost immediately.
Overall, the declining trend in the cash conversion cycle indicates positive developments in Texas Pacific Land Trust's cash management and operational efficiency, potentially leading to enhanced liquidity and financial performance.