Texas Pacific Land Trust (TPL)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 539,138 | 486,053 | 562,307 | 362,393 | 217,261 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,132,460 | 1,043,200 | 772,887 | 651,711 | 485,184 |
| Return on total capital | 47.61% | 46.59% | 72.75% | 55.61% | 44.78% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $539,138K ÷ ($—K + $1,132,460K)
= 47.61%
The return on total capital for Texas Pacific Land Trust has shown significant fluctuations over the years, as indicated by the data provided. As of December 31, 2020, the return on total capital was 44.78%, which increased to 55.61% by December 31, 2021, signaling improved efficiency in generating returns relative to the total capital employed.
The return on total capital experienced a substantial surge to 72.75% by December 31, 2022, indicating a remarkable increase in the profitability of the trust's capital investments. However, there was a notable decline in the return on total capital to 46.59% by December 31, 2023.
In the most recent year, as of December 31, 2024, the return on total capital stood at 47.61%, showing a marginal increase compared to the previous year but still lower than the peak observed in 2022.
Overall, the trend in the return on total capital for Texas Pacific Land Trust displays variability, with periods of significant growth followed by fluctuations. This metric reflects the trust's ability to generate profits relative to the total capital deployed and may point to changes in operational efficiency, capital allocation strategies, or external factors impacting the trust's financial performance.