Westlake Chemical Corporation (WLK)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 822,000 | 3,073,000 | 2,798,000 | 430,000 | 653,000 |
| Interest expense | US$ in thousands | 165,000 | 177,000 | 176,000 | 142,000 | 124,000 |
| Interest coverage | 4.98 | 17.36 | 15.90 | 3.03 | 5.27 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $822,000K ÷ $165,000K
= 4.98
Westlake Corporation's interest coverage ratio has exhibited variability over the past five years. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income. In 2023, the interest coverage ratio stood at 7.47, a decrease from the previous year's ratio of 17.42. Despite this decrease, the company's interest coverage remains at a sufficient level in 2023. The significant improvement in 2022 from 2021 indicates that the company's operating income was able to cover its interest expenses more comfortably. The lower ratios in 2020 and 2019 suggest that the company may have had challenges meeting its interest obligations with its operating income during those years. Overall, Westlake Corporation's interest coverage has shown fluctuations, indicating the importance of monitoring the company's ability to meet its interest payments in relation to its operating performance.
Peer comparison
Dec 31, 2023