Texas Pacific Land Trust (TPL)
Cash conversion cycle
| 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 | 21.28 | 554.48 | 612.22 | 705.44 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 21.28 + — – —
= 21.28
The cash conversion cycle of Texas Pacific Land Trust has shown a significant improvement over the past few years. In particular, from December 31, 2020, where the company's cash conversion cycle was at 705.44 days, it has decreased to 21.28 days as of December 31, 2023.
This improvement suggests that the company has become more efficient in managing its working capital. A shorter cash conversion cycle indicates that the company is able to convert its investments in inventory and receivables into cash more quickly. The decrease in the cash conversion cycle could be attributed to better inventory management, faster collection of receivables, or more efficient payment of payables.
Overall, the trend in Texas Pacific Land Trust's cash conversion cycle indicates positive changes in their working capital management, potentially leading to improved liquidity and financial performance over time.