Westlake Chemical Corporation (WLK)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	729,000	3,050,000	2,800,000	429,000	656,000
Total assets	US$ in thousands	21,035,000	20,550,000	18,459,000	13,835,000	13,261,000
Operating ROA		3.47%	14.84%	15.17%	3.10%	4.95%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $729,000K ÷ $21,035,000K
= 3.47%

Westlake Corporation's operating return on assets (operating ROA) has varied over the past five years. In 2023, the operating ROA was 5.86%, which shows a decrease from the prior year in 2022 when it was 15.00%. This significant decrease may indicate a decline in the efficiency of the company's operations in generating profits relative to its assets.

Comparing the current operating ROA to earlier years, we observe fluctuations. In 2021, the operating ROA was relatively high at 15.28%, suggesting that the company was effectively utilizing its assets to generate operating income. In contrast, in 2020, the operating ROA dropped to 3.36%, indicating a decrease in profitability compared to the previous year.

Looking back further, in 2019, Westlake Corporation had an operating ROA of 5.23%, which is comparable to the most recent figure in 2023. This suggests that the company has returned to a similar level of operational efficiency as it had a few years earlier.

Overall, the fluctuations in Westlake Corporation's operating ROA indicate varying levels of effectiveness in generating operating income relative to its assets over the past five years. It is important for the company to analyze the reasons behind these fluctuations and work towards enhancing its operational performance to improve its financial health and long-term sustainability.