Westlake Chemical Corporation (WLK)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 2.80 2.79 2.61 2.46 2.37 2.54 2.95 2.85 2.60 2.48 2.39 2.12 2.25 3.39 2.99 2.82 2.56 2.78 2.85 3.68
Quick ratio 2.44 2.36 2.12 2.01 1.89 1.88 2.13 1.97 1.75 1.61 1.53 1.34 1.61 3.28 2.96 2.83 2.64 2.92 2.05 2.74
Cash ratio 1.77 1.61 1.41 1.38 1.31 1.15 1.26 1.12 0.97 0.72 0.52 0.41 0.81 2.41 1.92 1.83 1.75 1.86 1.00 1.50

Westlake Chemical Corporation's liquidity ratios provide insight into its ability to meet short-term obligations. The current ratio fluctuated between 2.12 and 3.39 over the past five years, showing a generally healthy level of current assets to cover current liabilities. However, there was a slight decrease in the current ratio from 3.39 in September 2021 to 2.80 in December 2024.

The quick ratio, which excludes inventory from current assets, ranged between 1.34 and 3.28 during the same period. This ratio indicates that the company has a strong ability to meet short-term obligations without relying on selling inventory. Notably, there was a significant drop from 3.28 in September 2021 to 1.61 in December 2021, followed by some fluctuation but with an upward trend over the next three years.

The cash ratio, measuring the firm's ability to cover immediate liabilities with cash and cash equivalents, varied from 0.41 to 2.41 from March 2022 to September 2021. The cash ratio hit a low point in December 2021 at 0.81 but showed improvement in the following periods, reaching 1.77 by December 2024. Overall, Westlake Chemical Corporation maintained reasonable liquidity levels with fluctuations in certain periods that may require further monitoring.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 74.90 82.90 83.13 78.08 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

The cash conversion cycle of Westlake Chemical Corporation has been fluctuating over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for a company to convert its resources invested in inventory and accounts receivable into cash flows from sales.

Analyzing the data provided, we observe that the cash conversion cycle fluctuated between approximately 72 days to 98 days during the period. A lower number of days generally indicates that the company takes less time to convert its investments into cash, whereas a higher number of days may suggest inefficiencies in inventory management or collection of accounts receivable.

During the period under review, Westlake Chemical Corporation's cash conversion cycle experienced a significant increase from March 31, 2022, to June 30, 2022, reaching a peak of 92.48 days before declining again. This fluctuation could indicate varying levels of efficiency in managing working capital. Subsequently, the cash conversion cycle ranged between 72.05 to 84.47 days by December 31, 2023, exhibiting some stability as the company managed its working capital more effectively.

Overall, monitoring the cash conversion cycle is crucial for assessing the company's liquidity and efficiency in managing its operating cycle. Westlake Chemical Corporation should continue to focus on optimizing its cash conversion cycle to enhance operational performance and maintain healthy liquidity levels.