Texas Pacific Land Trust (TPL)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | — | — | 6,548 | 16,881 | 16,806 |
| Interest coverage | — | — | 85.87 | 21.47 | 12.93 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $539,138K ÷ $—K
= —
To analyze Texas Pacific Land Trust's interest coverage based on the provided data:
1. Interest coverage for December 31, 2020, was 12.93, indicating that the company generated 12.93 times the earnings needed to cover its interest expenses during that period. This level suggests a moderate ability to meet interest obligations.
2. In the subsequent year, interest coverage improved significantly to 21.47 as of December 31, 2021. This implies that the company's earnings were 21.47 times higher than its interest expenses, reflecting a strengthened capacity to service debt obligations.
3. By December 31, 2022, Texas Pacific Land Trust's interest coverage had surged to 85.87, showcasing a substantial enhancement in its ability to cover interest costs. This indicates a robust financial position in terms of meeting interest payments.
4. However, for the years 2023 and 2024, the interest coverage data is not available ("-"). It is essential to monitor future financial reports to assess the company's continued ability to generate earnings to cover interest expenses during those periods.
In conclusion, Texas Pacific Land Trust's interest coverage has demonstrated a positive trend, implying an enhanced ability to meet interest obligations, with a particularly noteworthy improvement in 2022. Continued monitoring is crucial to assess the sustainability of this trend in the upcoming years.