Westlake Chemical Corporation (WLK)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 20,750,000 | 21,035,000 | 20,550,000 | 18,459,000 | 13,835,000 |
| Total stockholders’ equity | US$ in thousands | 10,527,000 | 10,241,000 | 9,931,000 | 7,955,000 | 6,043,000 |
| Financial leverage ratio | 1.97 | 2.05 | 2.07 | 2.32 | 2.29 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $20,750,000K ÷ $10,527,000K
= 1.97
The financial leverage ratio for Westlake Chemical Corporation has shown fluctuations over the period from December 31, 2020, to December 31, 2024. The ratio was 2.29 in 2020 and increased slightly to 2.32 by the end of 2021. However, there was a notable decrease in the ratio to 2.07 and 2.05 in 2022 and 2023, respectively. The trend continued to decrease, reaching 1.97 by the end of 2024.
This trend indicates that Westlake Chemical Corporation's reliance on debt has been gradually decreasing over the years, which may suggest a more conservative approach to financing its operations. A lower financial leverage ratio is generally considered favorable as it implies less financial risk and greater financial stability for the company. It indicates that the company is relying more on equity financing rather than debt, which could potentially enhance its financial health and resilience to economic downturns.
Peer comparison
Dec 31, 2024