Texas Pacific Land Trust (TPL)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | 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 | 539,138 | 530,457 | 530,084 | 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 | 0 | 8,793 | 8,793 | 8,793 | 17,586 | 12,715 | 14,635 | 15,265 | 6,548 | 2,626 | 706 | 76 | 0 | 0 |
| Interest coverage | — | 60.33 | 60.28 | 58.81 | 27.64 | 37.47 | 34.95 | 35.57 | 85.87 | 214.75 | 715.47 | 5,587.95 | — | — |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $539,138K ÷ $0K
= —
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a more comfortable financial position, as the company is generating enough income to cover its interest expenses.
Analyzing the interest coverage of Texas Pacific Land Trust from September 2021 to December 2024 reveals a varying trend. The interest coverage ratio was not available in September 2021 and December 2021. However, in March 2022, the interest coverage ratio spiked to an elevated level of 5,587.95, indicating a significant increase in the ability of the company to cover its interest payments.
Subsequently, the interest coverage ratio declined in the following quarters, demonstrating a decrease in the company's ability to cover interest expenses. By December 2024, the interest coverage ratio dropped to a level of 0, suggesting that the company's operating income may not be sufficient to cover its interest obligations.
Overall, the fluctuating trend in Texas Pacific Land Trust's interest coverage ratio indicates potential variations in the company's financial performance and ability to meet its interest payment obligations in the future. Investors and stakeholders should closely monitor this ratio to assess the company's financial health and risk profile.