Westlake Chemical Corporation (WLK)
Return on assets (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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 479,000 | 1,208,000 | 1,324,000 | 1,885,000 | 2,247,000 | 2,659,000 | 2,865,000 | 2,529,000 | 2,015,000 | 1,484,000 | 934,000 | 427,000 | 330,000 | 289,000 | 390,000 | 494,000 | 421,000 | 472,000 | 622,000 | 781,000 |
| 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 |
| ROA | 2.28% | 5.65% | 6.31% | 9.06% | 10.93% | 13.02% | 14.06% | 12.81% | 10.92% | 8.67% | 6.35% | 3.04% | 2.39% | 2.11% | 2.88% | 3.49% | 3.17% | 3.60% | 5.09% | 6.45% |
December 31, 2023 calculation
ROA = Net income (ttm) ÷ Total assets
= $479,000K ÷ $21,035,000K
= 2.28%
To analyze Westlake Corporation's return on assets (ROA) based on the provided data, we observe a decreasing trend in ROA over the past eight quarters. ROA declined from 12.76% in Q1 2022 to 2.26% in Q4 2023. This consistent decline suggests a potential deterioration in the company's ability to generate profits relative to its total assets.
The decreasing ROA could result from various factors such as declining sales, rising costs, or inefficient asset utilization. It is essential for the company to address these issues to improve its profitability and overall financial performance.
Furthermore, the significant decrease in ROA from Q1 2023 (9.00%) to Q4 2023 (2.26%) indicates a recent sharp decline in profitability. This could raise concerns about the company's current financial health and operational effectiveness.
Overall, a declining trend in ROA signals a potential need for Westlake Corporation to review its operational strategies, cost management, and asset allocation to enhance profitability and efficiency in utilizing its assets.
Peer comparison
Dec 31, 2023