Westlake Chemical Corporation (WLK)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 10,185,000 | 10,329,000 | 11,721,000 | 8,283,000 | 6,481,000 |
| Inventory | US$ in thousands | 1,697,000 | 1,622,000 | 1,866,000 | 1,407,000 | 918,000 |
| Inventory turnover | 6.00 | 6.37 | 6.28 | 5.89 | 7.06 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $10,185,000K ÷ $1,697,000K
= 6.00
Westlake Chemical Corporation's inventory turnover has shown fluctuations over the last five years. The inventory turnover ratio measures how efficiently the company is managing its inventory by indicating how many times the inventory is sold and replaced during a specific period.
In 2020, the inventory turnover ratio was 7.06, indicating that the company sold and replaced its inventory approximately 7 times during that year. However, this ratio decreased to 5.89 in 2021, suggesting a decrease in the efficiency of inventory management.
In the subsequent years, there was a slight improvement in the inventory turnover ratio, reaching 6.28 in 2022, 6.37 in 2023, and then dropping to 6.00 in 2024. These fluctuations suggest that Westlake Chemical Corporation may have experienced challenges in efficiently managing its inventory during this period.
Overall, the trend in inventory turnover indicates that the company should continue to monitor its inventory management practices to ensure optimal efficiency in its operations. A higher inventory turnover ratio generally indicates better liquidity and operational efficiency, while a declining ratio may signify inventory management issues that could impact the company's financial performance.
Peer comparison
Dec 31, 2024