Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Texas Pacific Land Corp., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The financial ratios for the company over the examined periods reveal significant variability with overall robust liquidity positions. The current ratio shows high fluctuations, ranging from a low of 8.16 to a peak of 22.99, indicating that the company generally maintains a strong ability to cover its short-term liabilities with current assets. Despite some decreases after certain peaks—such as from 19.23 in September 2020 down to 10.34 in December 2021—there are subsequent recoveries that underscore a potential active management of working capital.
Similarly, the quick ratio, which excludes inventory from current assets, follows a pattern closely mirroring the current ratio. It ranges from a minimum of 8.16 to a maximum near 22.90, suggesting that most current assets are liquid or near-liquid. This alignment between quick and current ratios highlights minimal reliance on inventory to support short-term obligations, indicating strong liquidity without significant concern for inventory turnover risks.
The cash ratio exhibits a narrower range with lower values relative to the other two ratios, fluctuating between 6.24 and 20.21. Although this ratio is consistently lower, it still remains comfortably above 1.0, demonstrating that the company holds considerable cash or cash equivalents relative to its current liabilities. The cash ratio’s pattern of peaks and troughs parallels the other liquidity ratios, reinforcing the overall impression of fluctuating yet strong short-term financial health.
- Trend Analysis
- All three liquidity ratios experienced significant increases during mid-2020 through early 2021, which may suggest either reduced current liabilities, increased current assets, or improvements in cash holdings during this period.
- The ratios dipped moderately toward the end of 2021 but rebounded strongly from early 2023 to mid-2024, with peaks around June and September 2024, indicating continued emphasis on liquidity management.
- The consistently high ratios reflect a conservative liquidity strategy, possibly prioritizing preservation of cash and ready assets to meet obligations promptly.
- Insights
- The company appears to maintain a substantial liquidity buffer, focusing on high-quality liquid assets given the proximity between current and quick ratios.
- The high cash ratios in most periods further confirm a preference for cash or cash equivalents, reducing refinancing and liquidity risks.
- Volatility in the ratios may be influenced by seasonal factors or operational cash flow cycles, which warrants further investigation for clarity on working capital dynamics.
Current Ratio
Texas Pacific Land Corp., current ratio calculation (quarterly data)
| 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 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Current assets | 708,969) | 1,017,684) | 963,828) | 862,464) | 790,858) | 737,530) | 711,006) | 633,401) | 589,187) | 523,936) | 618,840) | 526,513) | 458,108) | 398,230) | 375,847) | 334,018) | 356,931) | 307,928) | 292,422) | ||||||
| Current liabilities | 57,331) | 44,268) | 70,871) | 44,387) | 47,370) | 44,884) | 61,037) | 39,595) | 43,599) | 57,073) | 67,279) | 50,900) | 29,102) | 21,810) | 33,848) | 20,581) | 18,562) | 17,357) | 35,836) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Current ratio1 | 12.37 | 22.99 | 13.60 | 19.43 | 16.70 | 16.43 | 11.65 | 16.00 | 13.51 | 9.18 | 9.20 | 10.34 | 15.74 | 18.26 | 11.10 | 16.23 | 19.23 | 17.74 | 8.16 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 1.07 | 1.16 | 1.23 | 1.27 | 1.25 | 1.43 | 1.43 | 1.47 | 1.40 | 1.31 | 1.43 | 1.26 | 1.28 | 1.17 | 1.11 | — | — | — | — | ||||||
| ConocoPhillips | 1.30 | 1.33 | 1.35 | 1.43 | 1.66 | 1.41 | 1.39 | 1.46 | 1.46 | 1.54 | 1.51 | 1.34 | 1.93 | 2.11 | 2.03 | — | — | — | — | ||||||
| Exxon Mobil Corp. | 1.35 | 1.36 | 1.38 | 1.48 | 1.42 | 1.48 | 1.46 | 1.41 | 1.34 | 1.16 | 1.07 | 1.04 | 0.90 | 0.85 | 0.80 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q3 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 708,969 ÷ 57,331 = 12.37
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations and overall trends in liquidity and working capital management over the analyzed periods.
- Current Assets
- Current assets display a general upward trajectory from March 2020 through June 2024, indicating an accumulation of assets readily convertible to cash. The figure increases significantly from approximately $292 million as of March 31, 2020, to a peak near $1 billion by June 30, 2024, with some fluctuations observed toward the end of the period. The growth suggests improved short-term resource availability over time, although a decline is noted in the last recorded period.
- Current Liabilities
- Current liabilities demonstrate variability without a consistent trend. Starting at roughly $36 million in March 2020, liabilities declined substantially in mid-2020, then fluctuated through to June 2024, oscillating between approximately $17 million and $71 million. Spikes in current liabilities are apparent around late 2021 and again in mid-2024, suggesting occasional increases in short-term obligations.
- Current Ratio
- The current ratio exhibits significant volatility but generally remains well above the benchmark value of 1, implying strong short-term financial stability throughout the period. Values reach extraordinary highs, such as 22.99 in September 2024, reflecting a very high buffer of current assets relative to current liabilities. The ratio peaked multiple times during the timeline, particularly around mid-2020, late 2022, and mid-2024. Despite some declines, the ratio never approaches levels that would indicate potential liquidity concerns, underscoring consistently conservative working capital management.
In summary, the data depicts a company with growing current asset levels and fluctuating current liabilities, maintaining a robust liquidity position with current ratios consistently well above standard thresholds. The volatility in current liabilities and occasional drops in current assets suggest periods of operational adjustments or strategic changes influencing short-term obligations and resource management.
Quick Ratio
Texas Pacific Land Corp., quick ratio calculation (quarterly data)
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Cash and cash equivalents | 533,914) | 894,704) | 837,100) | 725,169) | 654,158) | 609,252) | 590,619) | 510,834) | 446,588) | 389,794) | 507,356) | 428,242) | 372,761) | 329,134) | 310,655) | 281,046) | 315,759) | 258,364) | 223,743) | ||||||
| Accounts receivable and accrued receivables, net | 122,627) | 119,102) | 121,807) | 128,971) | 126,215) | 120,771) | 106,044) | 103,983) | 139,656) | 132,410) | 108,950) | 95,217) | 82,897) | 67,038) | 61,392) | 48,216) | 41,172) | 49,564) | 68,679) | ||||||
| Total quick assets | 656,541) | 1,013,806) | 958,907) | 854,140) | 780,373) | 730,023) | 696,663) | 614,817) | 586,244) | 522,204) | 616,306) | 523,459) | 455,658) | 396,172) | 372,047) | 329,262) | 356,931) | 307,928) | 292,422) | ||||||
| Current liabilities | 57,331) | 44,268) | 70,871) | 44,387) | 47,370) | 44,884) | 61,037) | 39,595) | 43,599) | 57,073) | 67,279) | 50,900) | 29,102) | 21,810) | 33,848) | 20,581) | 18,562) | 17,357) | 35,836) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Quick ratio1 | 11.45 | 22.90 | 13.53 | 19.24 | 16.47 | 16.26 | 11.41 | 15.53 | 13.45 | 9.15 | 9.16 | 10.28 | 15.66 | 18.16 | 10.99 | 16.00 | 19.23 | 17.74 | 8.16 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 0.68 | 0.73 | 0.81 | 0.87 | 0.84 | 0.97 | 1.03 | 1.12 | 1.03 | 1.00 | 1.12 | 0.90 | 0.90 | 0.83 | 0.77 | — | — | — | — | ||||||
| ConocoPhillips | 1.08 | 1.10 | 1.13 | 1.21 | 1.46 | 1.19 | 1.20 | 1.27 | 1.27 | 1.34 | 1.29 | 1.10 | 1.66 | 1.86 | 1.81 | — | — | — | — | ||||||
| Exxon Mobil Corp. | 0.98 | 0.98 | 1.02 | 1.06 | 1.05 | 1.06 | 1.07 | 1.03 | 0.98 | 0.84 | 0.74 | 0.69 | 0.55 | 0.51 | 0.47 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q3 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 656,541 ÷ 57,331 = 11.45
2 Click competitor name to see calculations.
The financial data over the observed quarters reveal notable fluctuations and trends in liquidity metrics such as total quick assets, current liabilities, and the quick ratio. These elements provide insights into the company's short-term financial health and its ability to meet immediate obligations.
- Total Quick Assets
- Total quick assets exhibit a generally increasing trend from March 2020 through June 2024, signaling an accumulation of highly liquid assets. Beginning at approximately $292 million, quick assets peak above $1 billion in mid-2024. Despite this overall growth, there is a sharp decline in quick assets in the final quarter reported (September 2024), dropping to about $656 million. This significant decrease is an outlier compared to the preceding quarters' upward momentum.
- Current Liabilities
- Current liabilities fluctuate more markedly without a clear long-term trend. Initial values show lower liabilities around $35.8 million in early 2020, dropping substantially in the middle of 2020 to near $17 million, followed by periodic rises and falls. Peaks in liabilities occur around December 2021 and March 2024, exceeding $67 million and $70 million respectively. These spikes could indicate periods of increased short-term obligations, possibly related to operational needs or financing activities.
- Quick Ratio
- The quick ratio follows an irregular pattern, reflecting the interplay between quick assets and current liabilities. Early 2020 values are high, ranging from 8 to 19 times, indicating strong liquidity relative to liabilities. This ratio diminishes to roughly 9 times by early 2022 but then sees oscillations up to a high of approximately 23 in mid-2024. The ratio notably decreases to around 11.45 in the latest quarter corresponding with the decrease in quick assets, suggesting a reduction in liquidity buffers relative to short-term liabilities during that period.
In summary, while the company generally maintains robust liquidity with quick assets growing over the period, there are periods of volatility in current liabilities and quick ratio that highlight fluctuations in short-term financial stability. The substantial drop in quick assets and the corresponding decrease in the quick ratio in the latest quarter warrant further investigation to understand underlying causes and implications.
Cash Ratio
Texas Pacific Land Corp., cash ratio calculation (quarterly data)
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Cash and cash equivalents | 533,914) | 894,704) | 837,100) | 725,169) | 654,158) | 609,252) | 590,619) | 510,834) | 446,588) | 389,794) | 507,356) | 428,242) | 372,761) | 329,134) | 310,655) | 281,046) | 315,759) | 258,364) | 223,743) | ||||||
| Total cash assets | 533,914) | 894,704) | 837,100) | 725,169) | 654,158) | 609,252) | 590,619) | 510,834) | 446,588) | 389,794) | 507,356) | 428,242) | 372,761) | 329,134) | 310,655) | 281,046) | 315,759) | 258,364) | 223,743) | ||||||
| Current liabilities | 57,331) | 44,268) | 70,871) | 44,387) | 47,370) | 44,884) | 61,037) | 39,595) | 43,599) | 57,073) | 67,279) | 50,900) | 29,102) | 21,810) | 33,848) | 20,581) | 18,562) | 17,357) | 35,836) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Cash ratio1 | 9.31 | 20.21 | 11.81 | 16.34 | 13.81 | 13.57 | 9.68 | 12.90 | 10.24 | 6.83 | 7.54 | 8.41 | 12.81 | 15.09 | 9.18 | 13.66 | 17.01 | 14.89 | 6.24 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 0.13 | 0.12 | 0.19 | 0.25 | 0.18 | 0.32 | 0.47 | 0.52 | 0.42 | 0.32 | 0.38 | 0.21 | 0.24 | 0.27 | 0.26 | — | — | — | — | ||||||
| ConocoPhillips | 0.63 | 0.58 | 0.60 | 0.66 | 0.91 | 0.71 | 0.75 | 0.72 | 0.74 | 0.67 | 0.61 | 0.55 | 1.14 | 1.31 | 1.18 | — | — | — | — | ||||||
| Exxon Mobil Corp. | 0.39 | 0.37 | 0.46 | 0.48 | 0.46 | 0.48 | 0.49 | 0.43 | 0.41 | 0.24 | 0.15 | 0.12 | 0.08 | 0.06 | 0.06 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q3 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 533,914 ÷ 57,331 = 9.31
2 Click competitor name to see calculations.
The financial data reveals several notable trends in liquidity and short-term obligations over the observed periods.
- Total cash assets
- Total cash assets showed an overall upward trajectory from March 2020 through June 2024, increasing from approximately $224 million to a peak near $895 million in September 2024 before experiencing a decline to approximately $534 million in the final quarter observed. This trend suggests a general strengthening of cash reserves over the medium term, with a significant accumulation during 2021 through the first half of 2024. The dip in the last recorded quarter indicates a notable reduction, warranting further analysis as to its causes.
- Current liabilities
- Current liabilities fluctuated throughout the period. Starting around $36 million in the first quarter of 2020, they decreased mid-2020 but then experienced several peaks and troughs over the following years. Notably, there were spikes in December 2021 and March 2024, reaching values above $60 million and $70 million respectively. Mid and late 2024 saw some volatility as well, indicating variability in short-term obligations during these periods.
- Cash ratio
- The cash ratio, representing the company's ability to cover short-term liabilities with cash assets, exhibited considerable variability. It peaked at over 20 times in June 2024, indicating a strong liquidity position at that point. The ratio was generally high during most quarters, often exceeding 10, with occasional declines such as in December 2021 and September 2024, where it dropped below 10. These fluctuations correlate with the changes observed in cash assets and current liabilities, reflecting dynamic liquidity management practices.
In summary, the analyzed data points to a company maintaining robust levels of cash relative to its current liabilities for most periods, with fluctuations in both liabilities and cash impacting liquidity ratios. The spike in cash assets and cash ratio in mid-2024 followed by declines is a key point of attention for assessing subsequent liquidity and operational funding strategies.