Westlake Chemical Corporation (WLK)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | 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 |
| Receivables | US$ in thousands | 1,483,000 | 1,601,000 | 1,801,000 | 1,868,000 | 1,214,000 |
| Total current liabilities | US$ in thousands | 2,219,000 | 2,790,000 | 2,298,000 | 2,344,000 | 1,357,000 |
| Quick ratio | 2.44 | 1.89 | 1.75 | 1.61 | 2.64 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($2,919,000K
+ $1,009,000K
+ $1,483,000K)
÷ $2,219,000K
= 2.44
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets.
Looking at the data for Westlake Chemical Corporation, we can see a fluctuation in the quick ratio over the years.
As of December 31, 2020, the quick ratio was 2.64, indicating that the company had $2.64 of liquid assets available to cover each dollar of current liabilities. This suggests a strong liquidity position.
However, by December 31, 2021, the quick ratio had decreased to 1.61. While still above 1, this drop indicates that the company's ability to cover its short-term obligations with liquid assets had decreased.
Over the following years, the quick ratio improved to 1.75 by December 31, 2022, further to 1.89 by December 31, 2023, and then significantly increased to 2.44 by December 31, 2024. These improvements suggest that the company was better able to meet its short-term obligations with its liquid assets in those years.
Overall, fluctuations in the quick ratio indicate changes in Westlake Chemical Corporation's liquidity position over the years, with improvements observed in later years compared to the initial decrease in 2021. It will be important for stakeholders to monitor this ratio going forward to assess the company's ability to meet its short-term obligations.
Peer comparison
Dec 31, 2024