Westlake Chemical Corporation (WLK)

Days of inventory on hand (DOH)

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover		6.37	6.24	6.63	6.25	6.28	5.63	5.08	4.89	5.89	6.69	7.39	6.99	7.06	7.81	7.71	7.26	7.33	7.58	7.45	6.63
DOH	days	57.32	58.49	55.02	58.39	58.11	64.80	71.92	74.70	62.00	54.60	49.42	52.18	51.70	46.75	47.33	50.27	49.82	48.16	49.02	55.08

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.37
= 57.32

The days of inventory on hand (DOH) for Westlake Corporation have shown a decreasing trend over the past few quarters, indicating that the company is managing its inventory more efficiently. In Q4 2023, the DOH stood at 57.32 days, a decrease from 58.49 days in Q3 2023. This suggests that the company is holding less inventory on hand, which can lead to cost savings and improved liquidity.

Comparing Q4 2023 to the same period in the previous year, there has been a noticeable improvement, as the DOH decreased from 58.11 days in Q4 2022 to 57.32 days in Q4 2023. This signals that Westlake Corporation has improved its inventory management practices over the year, potentially by streamlining operations, reducing excess inventory, or optimizing supply chain processes.

Furthermore, when looking at a longer time frame, the company has made significant progress in inventory management, as evidenced by the DOH decreasing from 74.70 days in Q1 2022 to 57.32 days in Q4 2023. This sustained improvement indicates that Westlake Corporation has been successful in controlling inventory levels and aligning them with demand, ultimately enhancing its operational efficiency and profitability.