Texas Pacific Land Trust (TPL)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Gross profit margin | 85.39% | 89.18% | 85.58% | 81.44% |
| Operating profit margin | 76.96% | 84.25% | 80.36% | 71.81% |
| Pretax margin | 81.95% | 85.23% | 80.50% | 72.60% |
| Net profit margin | 64.23% | 66.88% | 59.87% | 58.19% |
Texas Pacific Land Trust has shown consistent high levels of profitability over the past four years based on its profitability ratios. The gross profit margin has remained relatively stable, ranging from 81.44% in 2020 to 89.18% in 2022, indicating the company's ability to generate considerable profits after accounting for the cost of goods sold.
The operating profit margin, which reflects the company's ability to control operating expenses, has been consistently high, with a range of 71.81% in 2020 to 84.25% in 2022. This indicates effective cost management and efficient operations.
The pretax margin, a measure of overall profitability before accounting for taxes, has also shown a positive trend, ranging from 72.60% in 2020 to 85.23% in 2022. This demonstrates the company's ability to generate profits from its core operations before considering the impact of taxes.
The net profit margin, which indicates the company's bottom line profitability after all expenses have been deducted, has shown an increasing trend, from 58.19% in 2020 to 66.88% in 2022. This indicates that the company has been successful in converting its revenues into bottom-line profits over the years.
Overall, Texas Pacific Land Trust's profitability ratios depict a strong and consistent performance in terms of generating profits and managing expenses effectively.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 42.03% | 64.09% | 47.43% | 38.01% |
| Return on assets (ROA) | 35.08% | 50.87% | 35.33% | 30.80% |
| Return on total capital | 46.59% | 72.75% | 55.61% | 44.78% |
| Return on equity (ROE) | 38.88% | 57.75% | 41.43% | 36.28% |
From the provided data, we can observe the following trends in profitability ratios for Texas Pacific Land Trust over the four-year period:
1. Operating return on assets (Operating ROA) has shown varying levels, with a significant decrease from 64.09% in 2022 to 42.03% in 2023. This ratio indicates the company's ability to generate operating income from its assets.
2. Return on assets (ROA) has also fluctuated over the years, with a peak at 50.87% in 2022. This metric represents the overall profitability of the company in generating earnings from its total assets.
3. Return on total capital has demonstrated a similar trend to ROA, reaching its highest level at 72.75% in 2022. This ratio reflects the company's efficiency in generating returns from both equity and debt capital.
4. Return on equity (ROE) has shown a consistent increase from 36.28% in 2020 to 38.88% in 2023. ROE measures the company's profitability in relation to shareholders' equity, indicating how effectively the company is utilizing equity investments to generate returns.
Overall, Texas Pacific Land Trust's profitability ratios have shown fluctuations but generally positive trends, with some metrics peaking in 2022. The company seems to be effectively utilizing its assets, capital, and equity to generate profits, although closer analysis might be needed to understand the drivers behind the fluctuations in these ratios.