Westlake Chemical Corporation (WLK)

Fixed asset turnover

		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
Revenue (ttm)	US$ in thousands	12,548,000	13,021,000	13,862,000	15,094,000	15,794,000	16,002,000	15,101,000	13,477,000	11,778,000	10,236,000	9,079,000	7,929,000	7,504,000	7,422,000	7,590,000	8,025,000	8,118,000	8,230,000	8,419,000	8,510,000
Property, plant and equipment	US$ in thousands	8,519,000	8,570,000	8,550,000	8,518,000	8,477,000	8,301,000	8,303,000	8,276,000	7,606,000	6,992,000	6,919,000	6,921,000	6,920,000	6,853,000	6,887,000	6,883,000	6,912,000	6,842,000	6,832,000	6,720,000
Fixed asset turnover		1.47	1.52	1.62	1.77	1.86	1.93	1.82	1.63	1.55	1.46	1.31	1.15	1.08	1.08	1.10	1.17	1.17	1.20	1.23	1.27

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $12,548,000K ÷ $8,519,000K
= 1.47

Fixed asset turnover is a financial ratio that measures how effectively a company is utilizing its fixed assets to generate revenue. It is calculated by dividing net sales by average fixed assets.

Looking at the data provided for Westlake Corporation's fixed asset turnover over the past eight quarters, we can see fluctuations in the ratio. The fixed asset turnover ratio decreased from 1.77 in Q1 2023 to 1.47 in Q4 2023. This could indicate a lower level of efficiency in using fixed assets to generate sales revenue during the most recent quarter.

However, it's worth noting that the ratio has shown some variability over the past year, with peaks in Q4 2022 and Q3 2022 (1.85 and 1.93, respectively) and a trough in Q1 2022 (1.63). This suggests that the company's efficiency in utilizing fixed assets has not been consistent and has fluctuated over the quarters.

In general, a higher fixed asset turnover ratio indicates better utilization of fixed assets to generate revenue, while a lower ratio may suggest inefficiencies in asset utilization. Therefore, Westlake Corporation should monitor its fixed asset turnover ratio closely to ensure optimal utilization of its fixed assets and strive for consistency and improvement over time.