Texas Pacific Land Corp. (NYSE:TPL)

The financial data reveals several notable trends in the company's leverage and coverage ratios over the five-year period under review.

Debt Ratios

The debt to equity (including operating lease liability) ratio remained very low, starting at 0.01 in 2019 and 2020 and then dropping to zero from 2021 through 2023. This indicates an almost negligible reliance on debt financing relative to equity in recent years.

The debt to capital (including operating lease liability) ratio shows a similar pattern, maintaining a level of 0.01 in 2019 and 2020 before falling to zero thereafter. This reinforces the observation of minimal debt in the capital structure.

Likewise, the debt to assets (including operating lease liability) ratio began at 0.01 in 2019 and dropped to zero starting in 2020, further signaling an absence of debt liabilities against total assets in the most recent years.

Financial Leverage

The financial leverage ratio showed a slight but consistent decline over the timeframe. Beginning at 1.17 in 2019, it slightly increased to 1.18 in 2020, then steadily decreased over the next three years to 1.11 in 2023. This trend suggests a gradual reduction in financial leverage, reflecting a potentially more conservative capital structure and reliance less on borrowed funds.

Fixed Charge Coverage

The fixed charge coverage ratio experienced significant fluctuations but remained at robust levels throughout the period. It started very high at 575.65 in 2019, dipped to 314.8 in 2020, rose again substantially to 454.77 in 2021, peaked at 712.07 in 2022, and slightly decreased to 647.95 in 2023. Despite volatility, these high values indicate strong ability to cover fixed charges, such as interest and lease payments, with operating earnings.

Overall, the company shows an extremely low dependence on debt, with near-zero leverage from 2021 onward. The slight decrease in financial leverage aligns with this reduced debt presence. Meanwhile, the fixed charge coverage remains very strong, implying solid operational earnings to meet fixed financial obligations consistently. These patterns collectively point towards a highly conservative financial posture with minimal debt exposure and strong coverage capacity over the reviewed years.

The analysis of the provided financial data reveals a clear upward trend in total equity over the five-year period. Starting from US$ 512 million at the end of 2019, total equity experienced a slight decline in 2020 to approximately US$ 485 million. However, this was followed by consistent and significant increases in the subsequent years. By the end of 2021, total equity rose to roughly US$ 652 million, continued to increase to around US$ 773 million at the end of 2022, and reached approximately US$ 1.04 billion by the end of 2023.

Notably, there is no available data for total debt or the debt to equity ratio throughout the time frame. Consequently, any analysis regarding the company's leverage or solvency position cannot be conducted. This lack of debt data limits the completeness of the financial assessment, particularly for understanding the firm's capital structure or risk profile.

Overall, the growing equity base suggests strengthening financial stability and possibly expanding retained earnings or additional paid-in capital. The consistent equity growth after 2020 implies improved shareholder value and potentially increased operational profitability or successful capital management practices during the period observed.

Total Equity

Decreased slightly from 2019 to 2020, then experienced steady and strong growth through 2023, tripling in value from 2020 levels.

Total Debt

No data available, preventing analysis of debt trends or leverage.

Debt to Equity Ratio

No data available, preventing assessment of solvency or financial risk measures.

Total debt (including operating lease liability)

The total debt exhibited a fluctuating but overall declining trend over the five-year period. Beginning at 3,367 thousand USD in 2019, debt decreased steadily to 2,119 thousand USD by 2021, followed by a slight increase to 2,788 thousand USD in 2022. In 2023, the debt decreased again, reaching its lowest point of 2,024 thousand USD. This pattern suggests effective debt management with a general tendency towards reducing liabilities after a minor rebound in 2022.

Total equity

Total equity demonstrated consistent growth throughout the observed period. Starting at 512,137 thousand USD in 2019, equity slightly decreased to 485,184 thousand USD in 2020. However, from 2021 onward, a strong upward trajectory was evident, increasing to 651,711 thousand USD in 2021, 772,887 thousand USD in 2022, and surging to 1,043,196 thousand USD in 2023. This indicates significant strengthening of the company's equity base over the recent years.

Debt to equity (including operating lease liability)

The debt to equity ratio remained extremely low throughout the period, starting at 0.01 in 2019 and effectively reaching zero from 2021 onward. This ratio reflects the minimal reliance on debt financing relative to equity capital, emphasizing a strong balance sheet with very low leverage risk.

Total Capital

The total capital exhibited a generally increasing trend over the five-year period from 2019 to 2023. Starting at approximately $512 million in 2019, it experienced a slight decline in 2020 to around $485 million. From 2020 onward, there was consistent growth each year: rising to approximately $652 million in 2021, nearly $773 million in 2022, and reaching over $1.04 billion by the end of 2023. This indicates substantial capital expansion, particularly notable in the last two years.

Total Debt

No values were reported for total debt for any of the years under review, suggesting either the absence of debt or unreported data for this category. This lack of data prevents analysis of leverage or debt levels over the period.

Debt to Capital Ratio

No ratio data was provided; consequently, no conclusions can be drawn regarding the capital structure or leverage trends based on this metric.

Total debt (including operating lease liability)

The total debt exhibited a fluctuating but generally declining trend over the five-year period. It started at 3,367 thousand US dollars in 2019, decreased to 2,821 thousand in 2020, and further reduced to 2,119 thousand in 2021. A slight increase occurred in 2022, with debt rising to 2,788 thousand, followed by a subsequent decrease to 2,024 thousand in 2023. Overall, the data indicates an effective reduction in debt levels despite minor short-term increases.

Total capital (including operating lease liability)

Total capital demonstrated a consistent and significant upward trajectory throughout the period. Beginning at 515,504 thousand US dollars in 2019, it decreased slightly to 488,005 thousand in 2020 but subsequently surged to 653,830 thousand in 2021. This growth continued more sharply, reaching 775,675 thousand in 2022 and substantially increasing to 1,045,220 thousand by the end of 2023. This substantial capital expansion indicates enhanced financial resources and possibly increased investment or equity growth over the years.

Debt to capital (including operating lease liability)

The debt-to-capital ratio remained extremely low and showed a downward trend, effectively reaching zero in the years 2021 through 2023. In 2019 and 2020 the ratio was recorded at 0.01, denoting minimal leverage. The subsequent zero values indicate the company sustained negligible debt levels relative to its capital base, reflecting a strong capital structure with very low financial risk.

The financial data over the five-year period presents a clear upward trend in total assets. Starting from US$598,176 thousand in 2019, total assets decreased slightly to US$571,635 thousand in 2020 but subsequently increased significantly in the following years. By 2021, total assets rose to US$764,064 thousand and continued to expand to US$877,427 thousand in 2022. The trend culminated in a substantial growth reaching US$1,156,398 thousand by the end of 2023.

No data is available regarding total debt or the debt to assets ratio across the observed periods, which limits the ability to analyze leverage or financial risk dynamics within this time frame. The lack of this data suggests either no applicable debt or missing reporting in these categories.

Overall, the most salient pattern from the available metrics is the significant growth in asset base, indicating potential expansion activities, asset acquisitions, or revaluation gains. Without debt figures, it is not possible to assess how this growth was financed or the resulting impact on the capital structure.

Total Debt (Including Operating Lease Liability)

The total debt figures demonstrate a fluctuating but generally declining trend over the five-year period. Starting at $3,367 thousand in 2019, the debt decreased to $2,821 thousand in 2020, followed by a further reduction to $2,119 thousand in 2021. There was a slight increase in 2022 to $2,788 thousand, before dropping again to the lowest level of $2,024 thousand in 2023. This suggests a strong focus on debt reduction with short-term variations.

Total Assets

Total assets shows a consistent and significant upward trend throughout the period. The asset base grew from $598,176 thousand in 2019 to $571,635 thousand in 2020, which is a slight decline. However, from 2020 onwards, there was a robust increase, reaching $764,064 thousand in 2021, $877,427 thousand in 2022, and culminating at $1,156,398 thousand by the end of 2023. This indicates substantial asset accumulation and expansion over this period.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt-to-assets ratio remained consistently very low, effectively close to zero during the entire period. Starting at 0.01 in 2019, the ratio stabilized at 0.00 from 2020 through 2023. This signifies an extremely conservative leverage position relative to the assets held, reflecting strong financial stability and minimal reliance on debt financing relative to asset size.

Overall Analysis

The data reveals a financial profile characterized by a steadily growing asset base accompanied by a reduction in debt levels, resulting in a very low debt-to-asset ratio throughout the period. The company appears to prioritize asset growth and maintains low leverage, thereby suggesting a cautious approach to risk and an emphasis on balance sheet strength. The temporary increase in debt in 2022 is marginal and does not substantially impact the low leverage position.

Total assets

The total assets exhibited an overall increasing trend over the five-year period. Beginning at approximately 598 million US dollars at the end of 2019, the value slightly declined in 2020 to around 572 million US dollars. From 2020 onwards, total assets grew significantly, reaching approximately 764 million US dollars in 2021, 877 million US dollars in 2022, and culminating at about 1.16 billion US dollars by the end of 2023. This growth from 2020 reflects a steady expansion of the asset base.

Total equity

Total equity demonstrated a pattern similar to total assets, with a minor decrease from approximately 512 million US dollars in 2019 to around 485 million US dollars in 2020. Subsequently, total equity increased markedly, reaching roughly 652 million US dollars in 2021, 773 million US dollars in 2022, and finally reaching about 1.04 billion US dollars in 2023. This indicates strong equity growth and accumulation over the period following 2020.

Financial leverage

The financial leverage ratio remained relatively stable throughout the five-year span, with slight fluctuations. It registered 1.17 at the end of 2019 and 1.18 in 2020, indicating a marginal increase in leverage. In 2021, the ratio reverted to 1.17, followed by a decline to 1.14 in 2022, and further down to 1.11 in 2023. The downward trend in financial leverage from 2021 onwards suggests a gradual reduction in reliance on debt financing relative to equity.

Earnings Before Interest and Tax (EBIT)

The EBIT values reveal a fluctuating trend over the five-year period. In 2019, EBIT was recorded at $402,255 thousand, which subsequently declined sharply to $219,662 thousand in 2020. This represents a significant drop in operating profitability. However, EBIT recovered markedly in the following years, rising to $363,017 thousand in 2021 and then experiencing a substantial increase to $568,855 thousand in 2022. Despite this progress, a slight decrease occurred in 2023, with EBIT falling to $517,561 thousand. Overall, the EBIT shows volatility in earlier years followed by a strong recovery and high operating earnings in the last two years, albeit with a modest decline at the end.

Interest Expense

There is no recorded data for interest expense throughout the period, indicating either the absence of interest-bearing debt or non-disclosure of such expense.

Interest Coverage Ratio

The interest coverage ratio data is missing for all years, likely due to the absence of reported interest expenses, which limits the ability to assess the company’s ability to meet interest obligations from its operating earnings.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibit notable fluctuations over the five-year period. Starting at 402,955 thousand US dollars in 2019, earnings sharply declined to 220,362 thousand US dollars in 2020. This was followed by a recovery in 2021 to 363,817 thousand US dollars, a significant increase to 569,655 thousand US dollars in 2022, before slightly decreasing to 518,361 thousand US dollars in 2023. Overall, despite the drop in 2020, the trend indicates a strong recovery and growth trajectory through 2023.

Fixed charges

The fixed charges remained relatively stable, showing a slight increase from 700 thousand US dollars in 2019 and 2020 to 800 thousand US dollars from 2021 through 2023. This stability suggests consistent fixed costs over the analyzed period.

Fixed charge coverage ratio

The fixed charge coverage ratio, which reflects the ability to cover fixed charges with earnings, corresponds positively to the fluctuations in earnings. It started at a robust 575.65 in 2019, decreased to 314.8 in 2020 due to the earnings decline, then improved to 454.77 in 2021. The ratio reached its peak at 712.07 in 2022, reflecting the highest earnings relative to fixed charges during the period. In 2023, the ratio slightly decreased to 647.95 but remained at a strong coverage level.