Westlake Chemical Corporation (WLK)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 2,919,000 | 3,304,000 | 2,228,000 | 1,908,000 | 1,313,000 |
| Short-term investments | US$ in thousands | 1,009,000 | 360,000 | — | — | 1,059,000 |
| Total current liabilities | US$ in thousands | 2,219,000 | 2,790,000 | 2,298,000 | 2,344,000 | 1,357,000 |
| Cash ratio | 1.77 | 1.31 | 0.97 | 0.81 | 1.75 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,919,000K
+ $1,009,000K)
÷ $2,219,000K
= 1.77
Over the past five years, Westlake Chemical Corporation's cash ratio has demonstrated fluctuations. As of December 31, 2020, the company had a relatively strong cash ratio of 1.75, indicating that it had $1.75 in cash and cash equivalents for every $1 of current liabilities. However, by the end of 2021, the cash ratio decreased to 0.81, suggesting a deterioration in the company's short-term liquidity position.
In the following year, by December 31, 2022, the cash ratio improved to 0.97 but still remained below the level recorded in 2020. This indicates that Westlake Chemical had increased its cash and cash equivalents relative to its current liabilities but was not as liquid as it was in 2020.
By the end of 2023, the cash ratio further increased to 1.31, reflecting a stronger liquidity position compared to the previous year. This improvement suggests that the company may have focused on building up its cash reserves or managing its current liabilities more effectively.
Finally, as of December 31, 2024, Westlake Chemical Corporation's cash ratio rose to 1.77, reaching a level even higher than in 2020. This indicates that the company had significantly strengthened its liquidity position, possibly through increased cash holdings or efficient management of its current liabilities.
Overall, the trend in Westlake Chemical's cash ratio over the five-year period shows fluctuations but generally demonstrates efforts by the company to improve its liquidity position, with notable progress made in the later years.
Peer comparison
Dec 31, 2024