Westlake Chemical Corporation (WLK)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 21,035,000 | 20,550,000 | 18,459,000 | 13,835,000 | 13,261,000 |
| Total stockholders’ equity | US$ in thousands | 10,241,000 | 9,931,000 | 7,955,000 | 6,043,000 | 5,860,000 |
| Financial leverage ratio | 2.05 | 2.07 | 2.32 | 2.29 | 2.26 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $21,035,000K ÷ $10,241,000K
= 2.05
The financial leverage ratio for Westlake Corporation has displayed some fluctuations over the past five years. The ratio stood at 2.05 in 2023, slightly lower than the previous year's ratio of 2.07. This indicates that the company relied less on debt financing in 2023 compared to 2022. However, when compared to 2021 and earlier years, the financial leverage ratio has shown a downward trend. In 2021, the ratio was 2.32, decreasing to 2.29 in 2020, and further to 2.26 in 2019.
Overall, a financial leverage ratio above 1 suggests that the company has more debt than equity in its capital structure, indicating a higher level of financial risk. Westlake Corporation's ratio has been consistently above 2 in recent years, which may indicate a relatively high level of leverage in the company's operations. It is important for stakeholders to closely monitor changes in the financial leverage ratio to assess the company's ability to meet its financial obligations and manage its debt effectively.
Peer comparison
Dec 31, 2023