Westlake Chemical Corporation (WLK)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 16.12% | 17.68% | 25.79% | 29.67% | 13.63% |
| Operating profit margin | 7.21% | 5.81% | 19.31% | 23.77% | 5.72% |
| Pretax margin | 7.35% | 5.24% | 18.34% | 22.26% | 3.84% |
| Net profit margin | 4.96% | 3.82% | 14.23% | 17.11% | 4.40% |
Westlake Chemical Corporation's profitability ratios have demonstrated fluctuations over the years. The gross profit margin, which represents the percentage of revenue remaining after deducting the cost of goods sold, has shown a positive trend from 2020 to 2022, with a notable increase in 2021. However, there was a decline in 2023 and 2024.
The operating profit margin, indicating the proportion of revenue left after deducting operating expenses, improved significantly in 2021 but experienced a decrease in subsequent years.
Similarly, the pretax margin, reflecting the percentage of revenue remaining after all operating expenses except taxes, displayed a notable increase in 2021 but decreased in 2023 compared to 2022.
The net profit margin, representing the portion of revenue remaining after all expenses, including taxes, showed an improvement in 2021 before declining in 2023. Although the net profit margin increased slightly in 2024 compared to 2023, it remains lower than the levels seen in 2021 and 2022.
Overall, Westlake Chemical Corporation's profitability ratios have experienced fluctuations, indicating changes in the company's efficiency in generating profits from its operations over the years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.22% | 3.47% | 14.84% | 15.17% | 3.10% |
| Return on assets (ROA) | 2.90% | 2.28% | 10.93% | 10.92% | 2.39% |
| Return on total capital | 5.80% | 5.54% | 20.75% | 21.75% | 4.47% |
| Return on equity (ROE) | 5.72% | 4.68% | 22.63% | 25.33% | 5.46% |
Westlake Chemical Corporation's profitability ratios show significant fluctuations over the years. The Operating Return on Assets (Operating ROA) increased from 3.10% in 2020 to 15.17% in 2021, indicating a substantial improvement in the operational efficiency of the company. However, it slightly decreased to 14.84% in 2022 before dropping to 3.47% in 2023 and then recovering to 4.22% in 2024.
Similarly, the Return on Assets (ROA) rose from 2.39% in 2020 to 10.92% in 2021 but fell to 2.28% in 2023, before slightly recovering to 2.90% in 2024. This ratio indicates the company's ability to generate profits from its assets.
The Return on Total Capital peaked at 21.75% in 2021 but then declined to 5.54% in 2023 and slightly increased to 5.80% in 2024. This ratio reflects the efficiency of the company in generating returns from both debt and equity investments.
The Return on Equity (ROE) showed a similar trend, increasing from 5.46% in 2020 to 25.33% in 2021, before dropping to 4.68% in 2023, and then slightly recovering to 5.72% in 2024. ROE measures the return on shareholders' equity, indicating the profitability of the company from the perspective of its equity investors.
Overall, the profitability ratios of Westlake Chemical Corporation demonstrate variability in performance over the years, with some years showing significant improvements while others experienced declines. Further analysis and consideration of the company's operational strategies and financial management may be required to understand the reasons behind these fluctuations.