Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Texas Pacific Land Corp., liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Current ratio | 19.43 | 16.00 | 10.34 | 15.56 | 14.99 | |
| Quick ratio | 19.24 | 15.53 | 10.28 | 15.40 | 14.99 | |
| Cash ratio | 16.34 | 12.90 | 8.41 | 13.15 | 12.41 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Current Ratio
- The current ratio exhibited fluctuations over the five-year period, starting at a high level of 14.99 in 2019 and slightly increasing to 15.56 in 2020. It then decreased significantly to 10.34 in 2021 before rebounding sharply to 16.00 in 2022 and further increasing to 19.43 in 2023. Overall, the trend indicates strong liquidity with some volatility in 2021.
- Quick Ratio
- The quick ratio followed a similar pattern to the current ratio. Initial values in 2019 and 2020 were high, at 14.99 and 15.40 respectively. A notable decline occurred in 2021 to 10.28, followed by a recovery to 15.53 in 2022 and an increase to 19.24 in 2023. This pattern suggests that the company's liquid assets relative to liabilities showed resilience after a dip in 2021.
- Cash Ratio
- The cash ratio also displayed a trend consistent with the other liquidity measures. It decreased from 12.41 in 2019 to 8.41 in 2021, representing the lowest point in the period under review. Following this decline, it increased to 12.90 in 2022 and further to 16.34 in 2023. This indicates a recovery and strengthening of the company's most liquid assets during the most recent two years.
- Overall Trend and Insights
- All three liquidity ratios show a parallel movement pattern, with a decline in 2021 followed by marked improvement in 2022 and 2023. The year 2021 represents a period of relative weakening in liquidity, while the subsequent years demonstrate recovery and enhanced liquidity positions. The consistently high levels of these ratios throughout the timeline reflect a strong short-term financial health and ability to meet obligations using current and liquid assets. The sharp rebound after 2021 suggests effective financial management or changes in asset-liability structure contributing to improved liquidity.
Current Ratio
Texas Pacific Land Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 862,464) | 633,401) | 526,513) | 332,530) | 366,640) | |
| Current liabilities | 44,387) | 39,595) | 50,900) | 21,376) | 24,464) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 19.43 | 16.00 | 10.34 | 15.56 | 14.99 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Chevron Corp. | 1.27 | 1.47 | 1.26 | 1.18 | — | |
| ConocoPhillips | 1.43 | 1.46 | 1.34 | 2.25 | — | |
| Exxon Mobil Corp. | 1.48 | 1.41 | 1.04 | 0.80 | — | |
| Occidental Petroleum Corp. | 0.92 | 1.15 | 1.23 | 1.07 | — | |
| Current Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.37 | 1.42 | 1.15 | 1.00 | — | |
| Current Ratio, Industry | ||||||
| Energy | 1.37 | 1.40 | 1.15 | 1.02 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= 862,464 ÷ 44,387 = 19.43
2 Click competitor name to see calculations.
- Current assets
- The current assets show a consistent and significant upward trend over the five-year period. The figures increased from 366,640 thousand US dollars at the end of 2019 to 862,464 thousand US dollars by the end of 2023. This more than doubling indicates improved liquidity and a growing asset base available for short-term obligations.
- Current liabilities
- Current liabilities experienced some fluctuations during the period. Starting at 24,464 thousand US dollars in 2019, the liabilities initially decreased to 21,376 thousand US dollars in 2020 but then rose sharply to 50,900 thousand US dollars in 2021. In the subsequent years, current liabilities decreased and stabilized somewhat, reaching 44,387 thousand US dollars in 2023. Despite the fluctuation, the liabilities remain relatively low compared to current assets.
- Current ratio
- The current ratio remained very strong throughout the period, reflecting a robust liquidity position. It showed an initial increase from 14.99 in 2019 to 15.56 in 2020, followed by a decrease to 10.34 in 2021. Subsequently, the ratio improved significantly to 16 in 2022 and then further increased to 19.43 in 2023. This pattern corresponds with the changes in current assets and liabilities, indicating the company's strong ability to cover short-term liabilities by current assets.
- Overall trends
- Overall, the data indicates strong financial health with increasing current assets and a high current ratio, demonstrating a solid liquidity position over the years. The fluctuations in current liabilities in 2021 warrant attention, although they did not materially compromise liquidity. The company appears to have progressively enhanced its ability to meet short-term obligations, which is a positive indicator of operational stability.
Quick Ratio
Texas Pacific Land Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 725,169) | 510,834) | 428,242) | 281,046) | 303,645) | |
| Accounts receivable and accrued receivables, net | 128,971) | 103,983) | 95,217) | 48,216) | 62,995) | |
| Total quick assets | 854,140) | 614,817) | 523,459) | 329,262) | 366,640) | |
| Current liabilities | 44,387) | 39,595) | 50,900) | 21,376) | 24,464) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 19.24 | 15.53 | 10.28 | 15.40 | 14.99 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.87 | 1.12 | 0.90 | 0.77 | — | |
| ConocoPhillips | 1.21 | 1.27 | 1.10 | 1.98 | — | |
| Exxon Mobil Corp. | 1.06 | 1.03 | 0.69 | 0.44 | — | |
| Occidental Petroleum Corp. | 0.60 | 0.68 | 0.84 | 0.50 | — | |
| Quick Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.99 | 1.06 | 0.80 | 0.62 | — | |
| Quick Ratio, Industry | ||||||
| Energy | 0.98 | 1.04 | 0.81 | 0.63 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 854,140 ÷ 44,387 = 19.24
2 Click competitor name to see calculations.
- Total Quick Assets
-
The total quick assets exhibit a generally increasing trend over the five-year period. Starting from $366,640 thousand at the end of 2019, the value decreased slightly in 2020 to $329,262 thousand. However, from 2020 onwards, there is a notable upward trajectory, with total quick assets rising to $523,459 thousand in 2021, then to $614,817 thousand in 2022, and reaching $854,140 thousand by the end of 2023. This reflects a significant accumulation of highly liquid assets over time.
- Current Liabilities
-
Current liabilities show some fluctuations throughout the period. Beginning at $24,464 thousand in 2019, these liabilities declined moderately to $21,376 thousand in 2020. However, there was a marked increase in 2021, where current liabilities more than doubled to $50,900 thousand. Subsequently, the value decreased to $39,595 thousand in 2022, followed by a slight increase to $44,387 thousand in 2023. The variation suggests some volatility in short-term obligations during these years.
- Quick Ratio
-
The quick ratio indicates strong liquidity throughout the period, remaining well above typical benchmark values. It started at 14.99 in 2019, increasing slightly to 15.40 in 2020. In 2021, it dropped noticeably to 10.28, which aligns with the significant rise in current liabilities during the same year. This decline in ratio reflects a relative tightening of immediate liquidity. However, the ratio rebounded sharply to 15.53 in 2022, and further to 19.24 in 2023, indicating a strengthening liquidity position and enhanced capability to cover short-term liabilities with quick assets.
Cash Ratio
Texas Pacific Land Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 725,169) | 510,834) | 428,242) | 281,046) | 303,645) | |
| Total cash assets | 725,169) | 510,834) | 428,242) | 281,046) | 303,645) | |
| Current liabilities | 44,387) | 39,595) | 50,900) | 21,376) | 24,464) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 16.34 | 12.90 | 8.41 | 13.15 | 12.41 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Chevron Corp. | 0.25 | 0.52 | 0.21 | 0.25 | — | |
| ConocoPhillips | 0.66 | 0.72 | 0.55 | 1.46 | — | |
| Exxon Mobil Corp. | 0.48 | 0.43 | 0.12 | 0.08 | — | |
| Occidental Petroleum Corp. | 0.16 | 0.13 | 0.33 | 0.24 | — | |
| Cash Ratio, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.41 | 0.47 | 0.21 | 0.22 | — | |
| Cash Ratio, Industry | ||||||
| Energy | 0.40 | 0.45 | 0.22 | 0.22 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 725,169 ÷ 44,387 = 16.34
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets showed an overall upward trend from 2019 to 2023. Starting at $303.6 million in 2019, there was a slight decline to $281 million in 2020, followed by a significant increase to $428.2 million in 2021. This rising trajectory continued in 2022 and 2023, reaching $510.8 million and $725.2 million, respectively, indicating strong cash growth over the five-year period.
- Current Liabilities
- Current liabilities exhibited more volatility during the same period. Beginning at approximately $24.5 million in 2019, there was a decrease to $21.4 million in 2020. However, in 2021, current liabilities more than doubled to $50.9 million before decreasing again to about $39.6 million in 2022. A slight increase was observed in 2023, with current liabilities amounting to $44.4 million. Despite fluctuations, liabilities remained considerably lower than the total cash assets.
- Cash Ratio
- The cash ratio, which measures liquidity by comparing cash assets to current liabilities, reflected a generally high and improving liquidity position. Starting at 12.41 in 2019, it increased marginally to 13.15 in 2020. There was a dip in 2021 to 8.41, corresponding with the significant rise in liabilities. The ratio then rebounded strongly to 12.9 in 2022 and further to 16.34 in 2023, suggesting enhanced capacity to cover short-term obligations with cash.