Westlake Chemical Corporation (WLK)
Operating return on assets (Operating ROA)
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating income (ttm) | US$ in thousands | 729,000 | 1,608,000 | 1,775,000 | 2,554,000 | 3,050,000 | 3,596,000 | 3,941,000 | 3,486,000 | 2,800,000 | 2,105,000 | 1,323,000 | 639,000 | 429,000 | 353,000 | 500,000 | 658,000 | 656,000 | 761,000 | 931,000 | 1,141,000 |
| Total assets | US$ in thousands | 21,035,000 | 21,396,000 | 20,981,000 | 20,806,000 | 20,550,000 | 20,425,000 | 20,372,000 | 19,741,000 | 18,459,000 | 17,108,000 | 14,719,000 | 14,050,000 | 13,835,000 | 13,694,000 | 13,555,000 | 14,163,000 | 13,261,000 | 13,107,000 | 12,216,000 | 12,104,000 |
| Operating ROA | 3.47% | 7.52% | 8.46% | 12.28% | 14.84% | 17.61% | 19.35% | 17.66% | 15.17% | 12.30% | 8.99% | 4.55% | 3.10% | 2.58% | 3.69% | 4.65% | 4.95% | 5.81% | 7.62% | 9.43% |
December 31, 2023 calculation
Operating ROA = Operating income (ttm) ÷ Total assets
= $729,000K ÷ $21,035,000K
= 3.47%
Westlake Corporation's operating return on assets (operating ROA) has shown a declining trend over the past eight quarters. In Q4 2023, the operating ROA was 5.86%, which represents a decrease from the previous quarter's 7.59%. This downward trend is also evident when compared to Q1 2023, where the operating ROA was significantly higher at 12.40%.
Looking at a longer time frame, the operating ROA has been gradually decreasing since Q1 2022, where it stood at 17.82%. The decrease has been consistent, with a steeper decline seen in the more recent quarters. For instance, from Q2 2022 to Q4 2022, there was a noticeable drop in the operating ROA from 19.54% to 15.00%.
This declining trend in operating ROA may indicate potential challenges in generating operating profits relative to the level of assets employed in the business. It could suggest inefficiencies in asset utilization or changing market conditions impacting the company's profitability.
Further analysis of the company's operational performance, asset management practices, and overall business strategy would be necessary to understand the factors driving the decreasing operating ROA and to identify potential areas for improvement.
Peer comparison
Dec 31, 2023