Westlake Chemical Corporation (WLK)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,548,000 | 15,794,000 | 11,778,000 | 7,504,000 | 8,118,000 |
| Total current assets | US$ in thousands | 6,609,000 | 5,973,000 | 5,263,000 | 3,477,000 | 2,742,000 |
| Total current liabilities | US$ in thousands | 2,790,000 | 2,298,000 | 2,344,000 | 1,357,000 | 1,241,000 |
| Working capital turnover | 3.29 | 4.30 | 4.03 | 3.54 | 5.41 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $12,548,000K ÷ ($6,609,000K – $2,790,000K)
= 3.29
Westlake Corporation's working capital turnover fluctuated over the past five years, ranging from a low of 3.29 in 2023 to a high of 5.41 in 2019. The working capital turnover measures how efficiently the company is utilizing its working capital to generate sales revenue.
A higher working capital turnover ratio indicates that the company is generating more sales revenue per dollar of working capital invested, which reflects a more efficient use of resources. In Westlake's case, it achieved its highest efficiency in 2019 with a ratio of 5.41, indicating that it generated $5.41 in sales for every dollar invested in working capital.
However, the ratio decreased in the subsequent years, reaching its lowest point of 3.29 in 2023. This suggests that Westlake may have experienced challenges in managing its working capital efficiently in 2023 compared to previous years.
Overall, Westlake should closely monitor its working capital turnover ratio to ensure it maintains efficient utilization of working capital resources to support sales growth and operational effectiveness.
Peer comparison
Dec 31, 2023