Westlake Chemical Corporation (WLK)
Working capital 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 |
| Total current assets | US$ in thousands | 6,609,000 | 6,757,000 | 6,296,000 | 6,146,000 | 5,973,000 | 6,101,000 | 6,013,000 | 5,405,000 | 5,263,000 | 6,435,000 | 4,445,000 | 3,734,000 | 3,477,000 | 3,381,000 | 3,165,000 | 3,768,000 | 2,742,000 | 3,482,000 | 2,595,000 | 2,627,000 |
| Total current liabilities | US$ in thousands | 2,790,000 | 2,659,000 | 2,131,000 | 2,159,000 | 2,298,000 | 2,461,000 | 2,513,000 | 2,550,000 | 2,344,000 | 1,898,000 | 1,485,000 | 1,326,000 | 1,357,000 | 1,218,000 | 1,109,000 | 1,024,000 | 1,241,000 | 1,238,000 | 1,254,000 | 1,226,000 |
| Working capital turnover | 3.29 | 3.18 | 3.33 | 3.79 | 4.30 | 4.40 | 4.31 | 4.72 | 4.03 | 2.26 | 3.07 | 3.29 | 3.54 | 3.43 | 3.69 | 2.92 | 5.41 | 3.67 | 6.28 | 6.07 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $12,548,000K ÷ ($6,609,000K – $2,790,000K)
= 3.29
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate revenue. A higher ratio indicates a more efficient use of working capital.
Looking at the data provided, we observe that Westlake Corporation's working capital turnover has been fluctuating over the past eight quarters. The ratio ranged from a high of 4.72 in Q1 2022 to a low of 3.18 in Q3 2023.
The decreasing trend in the working capital turnover ratio from Q1 2022 to Q3 2023 suggests that the company may be experiencing challenges in efficiently using its working capital to generate revenue. This could be a cause for concern as it may indicate that the company is not effectively managing its short-term assets and liabilities to support its operations.
On the other hand, the ratio increased in Q4 2023 compared to the previous quarter, which could indicate a positive sign of improved efficiency in utilizing working capital. However, it is essential to track this trend over multiple quarters to determine if the increase is a sustained improvement or just a temporary fluctuation.
Overall, the working capital turnover ratio for Westlake Corporation shows variability in efficiency over the quarters, and further analysis is needed to understand the factors driving these changes and assess the company's overall financial health.
Peer comparison
Dec 31, 2023