Westlake Chemical Corporation (WLK)

Return on total capital

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	822,000	1,681,000	1,815,000	2,583,000	3,073,000	3,615,000	3,947,000	3,486,000	2,798,000	2,104,000	1,322,000	642,000	430,000	345,000	505,000	655,000	653,000	756,000	926,000	1,142,000
Long-term debt	US$ in thousands	4,607,000	4,574,000	4,894,000	4,892,000	4,879,000	4,813,000	4,858,000	4,902,000	4,911,000	4,929,000	3,555,000	3,547,000	3,566,000	3,681,000	3,745,000	4,432,000	3,445,000	3,424,000	2,669,000	2,669,000
Total stockholders’ equity	US$ in thousands	10,241,000	10,754,000	10,544,000	10,291,000	9,931,000	9,621,000	9,404,000	8,681,000	7,955,000	7,298,000	6,771,000	6,261,000	6,043,000	5,949,000	5,901,000	5,893,000	5,860,000	5,824,000	5,719,000	5,632,000
Return on total capital		5.54%	10.97%	11.76%	17.01%	20.75%	25.05%	27.67%	25.66%	21.75%	17.21%	12.80%	6.55%	4.47%	3.58%	5.24%	6.34%	7.02%	8.17%	11.04%	13.76%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $822,000K ÷ ($4,607,000K + $10,241,000K)
= 5.54%

Analyzing Westlake Corporation's return on total capital over the past eight quarters reveals a downward trend. The return on total capital decreased consistently from 27.88% in Q2 2022 to 8.13% in Q4 2023. These declining values suggest that the company's ability to generate profit from its total capital has weakened over time. It is vital for Westlake Corporation to investigate the underlying factors contributing to this declining trend and take appropriate measures to improve its return on total capital.