Texas Pacific Land Trust (TPL)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 517,142 | 486,053 | 476,421 | 511,518 | 542,946 | 562,307 | 563,937 | 505,122 | 424,684 | 362,393 | 291,764 |
| Interest expense (ttm) | US$ in thousands | 8,793 | 17,586 | 12,715 | 14,635 | 15,265 | 6,548 | 2,626 | 706 | 76 | 0 | 0 |
| Interest coverage | 58.81 | 27.64 | 37.47 | 34.95 | 35.57 | 85.87 | 214.75 | 715.47 | 5,587.95 | — | — |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $517,142K ÷ $8,793K
= 58.81
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a greater ability to meet interest obligations.
Analyzing the interest coverage of Texas Pacific Land Trust over the past few quarters, we observe fluctuations in the ratio. In March 2024, the interest coverage ratio was 58.81, showing a considerable ability to cover interest expenses. This is a decrease from the previous quarter, where the ratio was 27.64.
Looking further back, in December 2022 and September 2022, the interest coverage ratios were very high at 85.87 and 214.75, respectively, suggesting a strong ability to cover interest payments. However, in June 2022 and March 2022, the interest coverage ratios were extremely high at 715.47 and 5,587.95, respectively, implying a very high margin of safety in meeting interest obligations during those periods.
It is important to note that the interest coverage ratio for December 2021 and September 2021 is not provided in the data. Overall, the trend in interest coverage for Texas Pacific Land Trust has shown variability over the quarters, with some periods indicating a robust ability to cover interest expenses and others showing fluctuations. Further analysis and context would be necessary to fully understand the reasons behind these fluctuations.