Texas Pacific Land Trust (TPL)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 28.68 | 541.09 | 565.98 | 521.05 | 554.48 | 595.88 | 645.77 | 621.04 | 612.22 | 675.73 | |||
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | |||
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | |||
| Cash conversion cycle | days | 0.00 | 28.68 | 541.09 | 565.98 | 521.05 | 554.48 | 595.88 | 645.77 | 621.04 | 612.22 | 675.73 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
The cash conversion cycle of Texas Pacific Land Trust provides insights into the efficiency of the company in managing its cash flows and working capital. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash received from customer sales.
Analyzing the data from the table, we can observe fluctuations in the cash conversion cycle over the reported periods. In the most recent quarter, as of March 31, 2024, the trust managed to achieve a remarkably low cash conversion cycle of 0.00 days, indicating a swift conversion of investments into cash. This suggests efficient management of working capital, quick sales realization, and effective cash flow management.
In contrast, looking back at the previous quarters, we notice a significant increase in the cash conversion cycle from Sep 30, 2023, through Dec 31, 2023, where it peaked at 541.09 days and 565.98 days, respectively. During this period, the trust experienced challenges in converting its investments into cash, possibly due to slower inventory turnover or delays in collecting receivables.
Overall, the trend in the cash conversion cycle for Texas Pacific Land Trust shows variability, with fluctuations in efficiency over the reporting periods. The significant improvement in the most recent quarter reflects a positive development in the company's working capital management, while the previous quarters indicate periods of slower cash conversion. Monitoring and managing the cash conversion cycle is crucial for the trust to maintain liquidity, optimize operations, and enhance its overall financial performance.