Westlake Chemical Corporation (WLK)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	875,000	822,000	3,073,000	2,798,000	430,000
Interest expense	US$ in thousands	13,000	165,000	177,000	176,000	142,000
Interest coverage		67.31	4.98	17.36	15.90	3.03

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $875,000K ÷ $13,000K
= 67.31

To analyze Westlake Chemical Corporation's interest coverage, we will look at the trend over the past five years based on the provided data.

- In December 2020, the interest coverage ratio was 3.03, indicating that the company generated operating income 3.03 times greater than its interest expense. This suggests a relatively weaker ability to cover interest payments.

- By December 2021, there was a significant improvement in the interest coverage ratio to 15.90, demonstrating a healthier financial position with a better ability to meet interest obligations.

- The trend continued to strengthen in December 2022 with an interest coverage ratio of 17.36, showcasing continued improvement in the company's ability to cover interest expenses.

- However, by December 2023, there was a slight decline in the interest coverage ratio to 4.98, which may indicate a decrease in operating income relative to interest payments compared to the previous year.

- Remarkably, by December 2024, the interest coverage ratio surged to 67.31, reflecting a substantial increase in the company's operating income relative to its interest expenses. This signifies a robust financial position and a strong ability to cover interest payments.

In summary, Westlake Chemical Corporation's interest coverage ratio has displayed fluctuations over the past five years, indicating varying levels of financial sustainability. While there have been periods of improvement, there have also been fluctuations that may warrant closer monitoring to ensure the company's ability to meet its interest obligations.