Texas Pacific Land Corp. (NYSE:TPL)

Receivables Turnover Ratio

The receivables turnover ratio exhibited notable fluctuations over the periods, initially increasing from 5.76 to a peak of 8.23 by September 2020 before declining to a low range near 4.5 in mid-2022 and subsequently recovering to values slightly above 5 in early 2024. This pattern suggests periods of improved efficiency in collecting receivables followed by phases of slower collection, with a partial rebound towards the most recent quarters.

Payables Turnover Ratio

The payables turnover ratio showed high volatility across the timeline, with an upward spike reaching 40.66 in March 2022 and subsequent downtrends thereafter. Most values oscillated between approximately 16 and 28, indicating variable payment pacing to suppliers. The sharp spike indicates a period of more rapid payment cycles, while the subsequent decreases imply lengthening payment periods or changes in supplier credit terms.

Working Capital Turnover Ratio

The working capital turnover experienced a gradual declining trend from 1.54 in March 2020 to a nadir near 0.69 in September 2024, with intermittent small recoveries. The initial decline signals decreasing efficiency in using working capital to generate sales or revenues, while the slight improvement in the latest quarter could indicate a positive shift in operational effectiveness.

Average Receivable Collection Period

The average receivable collection period lengthened markedly from around 44-63 days in the early quarters of 2020 to peaks near 77-81 days during 2021 and 2022, suggesting slower collection of receivables during this timeframe. However, the period improved in late 2022, dropping to around 57 days, before fluctuating moderately near 65-75 days thereafter, indicating partial recovery in collection process efficiency but still slower compared to the initial periods.

Average Payables Payment Period

The average payables payment period remained relatively stable between 13 to 19 days for most periods but experienced a pronounced reduction to 9 days in March 2022, reflecting accelerated payments to creditors. Following this dip, payment periods generally reverted to mid-teens values, with a recent upward trend reaching 22 days by September 2024. The increase at the end may signify more extended payment terms or cash flow management adjustments.

The financial data reveals several notable trends over the periods analyzed. Revenues display an overall upward trajectory from early 2020 through mid-2022, with a peak in September 2022. Following this peak, revenues experienced some fluctuations but generally stabilized at a slightly lower level through the first half of 2024.

Specifically, revenues started at approximately $96.6 million in March 2020, dipped in the subsequent quarters of 2020, and then showed substantial growth by the end of 2021, reaching about $147 million. The growth continued into 2022, peaking near $191 million in the third quarter. However, revenues declined in the latter part of 2022 and into early 2023, fluctuating around the $146 million to $167 million range. From mid-2023 onward, revenues maintained a relatively consistent level near $172 million.

Accounts receivable and accrued receivables, net, demonstrated a rising trend from March 2020 through September 2022, increasing from about $68.7 million to nearly $139.7 million. A significant decline occurred in the last quarter of 2022, followed by a recovery and stabilization, with values remaining around $120 million to $129 million through mid-2024.

This pattern indicates that the company experienced increased credit sales or delayed collections in the earlier quarters, which peaked alongside revenues but later improved in collection efficiency. The accounts receivable amounts paralleled the revenue movements but showed less volatility after late 2022.

The receivables turnover ratio, which reflects the efficiency of collecting receivables, exhibited notable fluctuations. It increased markedly in the first half of 2020, reaching above 8 in the third quarter, indicating faster collection during that period. This was followed by a decline in turnover through late 2021 and early 2022, with ratios generally between 4.5 and 5.0, suggesting slower collection.

An improvement is observed from the last quarter of 2022 into 2024, with the turnover ratio rising back toward the 5.5 to 6.0 range, implying enhanced collection efficiency. This improvement aligns with the observed stabilization and partial reduction in accounts receivable balances after late 2022.

Revenue Trend

Steady growth from early 2020 to late 2022 with peaks in mid-2022, followed by stabilization and minor fluctuations in 2023 and early 2024.

Accounts Receivable Trend

Gradual increase paralleling revenue growth until late 2022, then a sharp decline and ensuing stabilization around slightly lower levels.

Receivables Turnover Ratio

High turnover in early 2020, decreasing efficiency during 2021 to early 2022, followed by an improvement and stabilization in collection speeds from late 2022 through mid-2024.

Overall, the data indicates that the company experienced revenue expansion with a corresponding increase in receivables, occasionally challenged by slower collections. The trend toward improved turnover and receivables size stabilization after late 2022 suggests efforts to enhance cash flow management and collection processes have been effective.

Revenues

Revenues exhibited a fluctuating yet generally upward trend over the analyzed periods. Starting at approximately $96.6 million in March 2020, there was a notable dip in the second quarter of 2020, reaching about $54.6 million. Following this, revenues recovered steadily through 2020 and 2021, peaking at approximately $147.2 million in December 2021. After a slight decrease in the first quarter of 2023, revenues rose again to a peak of about $176.3 million in June 2022. From mid-2023 to early 2024, revenues stabilized somewhat around $160 million to $174 million, showing less volatility compared to earlier periods.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses fluctuated significantly across the periods. The values started around $21.1 million in March 2020, then generally decreased toward the end of 2020. There was a pronounced increase in this liability in mid-2022, peaking around $30.7 million in September 2022, followed by some decline during late 2022 and early 2023. Notably, this figure rose again substantially towards mid and late 2024, reaching over $40.5 million. This pattern suggests variable management of payables possibly linked to operational cycles or strategic financing decisions.

Payables Turnover Ratio

The payables turnover ratio showed considerable variance through the quarters. Early periods from 2020 to 2021 ranged mostly between about 18.7 and 25.0, indicative of a relatively stable pace in settling payables. There was a remarkable spike to over 40 in March 2022, implying a much faster payment rate during that quarter. Subsequently, the ratio declined and fluctuated between approximately 16.9 and 28.3 through 2023 and 2024, suggesting alternating periods of slower and faster payables turnover. The decline to below 17 by September 2024 may indicate a slowing in payment speed relative to purchases or accrued expenses.

Overall Insights

Throughout the period, the company's revenues generally expanded with some seasonal or market-driven fluctuations. The significant variability in accounts payable aligns with changing payables turnover ratios, reflecting shifts in payment policies or operational cash management strategies. The peak in payables turnover ratio in early 2022 may correspond with an accelerated settlement of liabilities potentially aimed at optimizing vendor relations or financial positioning. Later periods show increased payables and slower turnover rates, which could indicate strategic deferrals of payments or liquidity considerations. These dynamics should be monitored closely as they affect cash flow and supplier relationships.

Working Capital

The working capital demonstrated a general upward trend from March 2020 through June 2024, increasing from approximately 257 million USD to over 973 million USD at its peak in June 2024. Despite this growth trajectory, the last recorded value in September 2024 shows a significant decline to around 652 million USD. This suggests a notable reduction in short-term financial resources or a change in current asset and liability management in the most recent quarter.

Revenues

Revenues experienced fluctuations throughout the periods analyzed. Initially, revenues were in the range of 54 to 147 million USD, with peaks in the latter half of 2021 and early 2022, reaching up to approximately 191 million USD in September 2022. Following this peak, revenues showed a decreasing pattern with some variability, stabilizing around 160 to 174 million USD in 2023 and 2024. The overall revenue trend shows growth compared to 2020 levels but with a degree of volatility in the latter periods.

Working Capital Turnover

The working capital turnover ratio declined notably from 1.54 in March 2020 to as low as 0.69 in September 2024, indicating decreasing efficiency in using working capital to generate sales over time. There are small recoveries observed in mid-2022 and again in the latest quarter of 2024, where the ratio increased to 1.05. However, the overall trend points to a weakening turnover ratio, which could imply that working capital has grown disproportionately compared to revenues or that revenues have not increased sufficiently relative to working capital.

Summary

The data reveals that while working capital substantially increased over the analyzed period, revenue growth was less consistent and showed signs of volatility, especially post-2021. The declining working capital turnover ratio over most of the period suggests declining operational efficiency in converting working capital into sales. The sharp decline in working capital in the most recent quarter contrasts with the partial recovery in turnover ratio, indicating a potential shift toward improved capital utilization or changes in asset/liability management. Monitoring these trends is critical for assessing liquidity management and operational efficiency going forward.

The analysis of the quarterly receivables turnover ratio and average receivable collection period reveals notable fluctuations over the observed periods. The receivables turnover ratio exhibits variability, with peak values around mid-2020 and early 2023, followed by a general downward trend into late 2023 before a moderate recovery in 2024. Correspondingly, the average receivable collection period inversely mirrors this pattern, extending during times of lower turnover and shortening when turnover increases.

Receivables Turnover Ratio

The turnover ratio starts at 5.76 in March 2020, rising to a high of 8.23 by September 2020, indicating improved efficiency in collecting receivables during that period. Subsequently, it declines to approximately 4.59–4.74 between September 2021 and December 2021, reflecting slower collections. In 2022, the ratio remains relatively stable but lower, around 4.49 to 4.74, before increasing significantly to 6.42 in December 2022. After this peak, the turnover decreases again through 2023, reaching lows near 4.89 and 4.9, before showing signs of recovery in the first two quarters of 2024 at 5.41 and 5.63, then slightly decreasing to 5.6 in the most recent quarter.

Average Receivable Collection Period

This metric moves inversely to the turnover ratio, reflecting the number of days on average that receivables remain outstanding. Beginning at 63 days in March 2020, it shortens to 44 days by September 2020 when turnover peaked, signifying faster collections. After this, the period increases to around 77–79 days from March 2021 through September 2021, corresponding with lower turnover ratios. Collection periods fluctuate between 57 and 81 days throughout 2022 and early 2023, showing variability in credit management or customer payment behavior. The period extends again to 75 days during late 2023 before beginning to decrease to approximately 65–67 days in the first half of 2024, aligning with the partial rebound in turnover ratios.

Insights and Implications

The data indicate cyclical variations in the company’s efficiency in collecting receivables, with periods of improved turnover and reduced collection days followed by phases of slower collection. The trends could be influenced by external market factors, changes in credit policies, or customer payment behavior. The recent improvement in turnover ratio alongside a decrease in days outstanding suggests an enhancement in receivables management or collection effectiveness in early 2024. However, fluctuations highlight the need for continuous monitoring to ensure optimal cash flow performance.

The analysis of the payables turnover ratio over the given quarters reveals fluctuating trends with notable volatility. Initially, the ratio showed moderate variation around the low twenties from 2020 through early 2021, suggesting a relatively consistent frequency of payables settlement within this period. However, a marked spike occurred in the first quarter of 2022, with the ratio reaching 40.66, indicating a significant increase in the turnover of payables and thus a much faster payment cycle during that quarter. This peak was followed by a steep decline and further fluctuations throughout 2022 and 2023, where the ratio mostly oscillated between approximately 20 and 28. Toward the last reported quarters of 2023 and 2024, the ratio showed a downward trajectory, ending at 16.93 which signals a slower payables turnover compared to the earlier periods.

Correspondingly, the average payables payment period, expressed in days, inversely mirrors the turnover ratio trends but with somewhat less extreme variations. For much of 2020 and 2021, the payment period remained fairly stable around 15 to 17 days, reinforcing the interpretation of consistent payables management. The first quarter of 2022 saw a significant reduction in the payment period to just 9 days, reflecting the rapid payment process suggested by the increased turnover ratio. Subsequent quarters restored the payment period to the mid-teens range, generally between 13 and 18 days, indicating a reversion toward a typical payment cycle. Notably, by the end of the observed timeline, the payment period extended to 22 days, which aligns with the observed decrease in payables turnover ratio and confirms a slowdown in creditor payments.

Payables Turnover Ratio

Exhibited moderate stability in the initial quarters, surged dramatically in early 2022, then fluctuated and gradually decreased through 2023 and 2024.

Average Payables Payment Period

Remained steady through 2020-2021, dropped sharply in early 2022, then generally returned to prior levels before extending towards the end of the period, indicating slower payments.

Relationship Between Metrics

The inverse relationship is evident; increases in payables turnover correspond with decreases in payment periods, and vice versa, reflecting changes in payment speed and cash management strategy over time.

Insight

The sharp changes in early 2022 suggest a strategic adjustment to expedite payables, potentially to capitalize on favorable conditions or supplier terms. The gradual lengthening of payment periods towards 2024 might indicate a shift toward more conservative cash flow management or changes in operational dynamics.