Westlake Chemical Corporation (WLK)

Cash conversion cycle

		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
Days of inventory on hand (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
Days of sales outstanding (DSO)	days	46.57	54.35	48.84	44.37	41.62	49.75	61.27	63.70	57.89	58.55	62.27	61.09	59.05	63.59	55.78	57.54	46.58	48.52	52.59	48.08
Number of days of payables	days	30.99	28.37	26.41	26.25	27.68	31.83	40.71	40.36	38.73	34.88	34.16	32.95	30.19	25.21	24.87	23.20	25.17	26.37	27.61	29.56
Cash conversion cycle	days	72.90	84.47	77.46	76.52	72.05	82.73	92.48	98.03	81.16	78.27	77.54	80.32	80.56	85.13	78.24	84.61	71.22	70.31	74.00	73.60

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.32 + 46.57 – 30.99
= 72.90

The cash conversion cycle measures the time it takes for a company like Westlake Corporation to convert its investments in inventory and other resources back into cash. A shorter cash conversion cycle indicates better liquidity and efficiency in managing working capital.

Based on the data provided:
- In Q4 2023, Westlake Corporation had a cash conversion cycle of 72.90 days, the shortest period among the reported quarters.
- In Q1 2023, the cash conversion cycle was 76.58 days, showing a slight increase from the previous quarter.
- The company experienced the longest cash conversion cycle in Q2 2022, taking 98.31 days to convert investments into cash.
- Generally, the trend in the cash conversion cycle over the quarters seems to fluctuate, with periods of improvement followed by slight deterioration.

Overall, Westlake Corporation should continue monitoring and managing its cash conversion cycle to ensure optimal utilization of working capital and maintain efficient liquidity levels.