Texas Pacific Land Trust (TPL)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 486,053 | 562,307 | 362,393 | 217,261 |
| Long-term debt | US$ in thousands | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,043,200 | 772,887 | 651,711 | 485,184 |
| Return on total capital | 46.59% | 72.75% | 55.61% | 44.78% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $486,053K ÷ ($—K + $1,043,200K)
= 46.59%
Texas Pacific Land Trust's return on total capital has shown fluctuations over the past four years. In 2023, the return on total capital was 46.59%, a decrease from the prior year's 72.75%. Despite the decrease, the return remains relatively high compared to the previous years. It was 55.61% in 2021 and 44.78% in 2020.
The decline in return on total capital from 2022 to 2023 may indicate a potential decrease in the company's efficiency in generating profits from its total capital employed. Further analysis of the company's financial performance and capital utilization may be needed to understand the reasons behind this decrease and to evaluate the overall effectiveness of the company in utilizing its capital to generate returns for its shareholders.