Westlake Chemical Corporation (WLK)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.22 | 0.22 | 0.22 | 0.22 | 0.22 | 0.21 | 0.23 | 0.24 | 0.24 | 0.24 | 0.24 | 0.25 | 0.27 | 0.29 | 0.24 | 0.25 | 0.26 | 0.27 | 0.28 | 0.31 |
| Debt-to-capital ratio | 0.30 | 0.30 | 0.30 | 0.31 | 0.31 | 0.30 | 0.32 | 0.32 | 0.33 | 0.33 | 0.34 | 0.36 | 0.38 | 0.40 | 0.34 | 0.36 | 0.37 | 0.38 | 0.39 | 0.43 |
| Debt-to-equity ratio | 0.43 | 0.43 | 0.43 | 0.44 | 0.45 | 0.43 | 0.46 | 0.48 | 0.49 | 0.50 | 0.52 | 0.56 | 0.62 | 0.68 | 0.53 | 0.57 | 0.59 | 0.62 | 0.63 | 0.75 |
| Financial leverage ratio | 1.97 | 1.98 | 1.99 | 2.03 | 2.05 | 1.99 | 1.99 | 2.02 | 2.07 | 2.12 | 2.17 | 2.27 | 2.32 | 2.34 | 2.17 | 2.24 | 2.29 | 2.30 | 2.30 | 2.40 |
Westlake Chemical Corporation's solvency ratios indicate the company's ability to meet its long-term financial obligations.
The Debt-to-assets ratio has shown a decreasing trend over time, from 0.31 in March 2020 to 0.22 by December 2024. This suggests that the company's level of debt in relation to its total assets has been decreasing steadily, reflecting a stronger financial position.
Similarly, the Debt-to-capital ratio has also declined over the years, indicating an improvement in the company's capital structure. The ratio decreased from 0.43 in March 2020 to 0.30 by December 2024, signaling that the proportion of debt in the company's capital has been decreasing.
The Debt-to-equity ratio follows a similar trend, decreasing from 0.75 in March 2020 to 0.43 by December 2024. This signifies that the reliance on debt financing in comparison to equity has reduced significantly, reflecting a healthier balance between debt and equity in the company's capital structure.
Furthermore, the Financial leverage ratio, which indicates the company's use of debt in its capital structure, has also decreased consistently over the years. The ratio declined from 2.40 in March 2020 to 1.97 by December 2024, showing that the company has been reducing its financial leverage, which is a positive sign for its solvency and financial stability.
Overall, Westlake Chemical Corporation's solvency ratios have shown a favorable trend, with a decrease in debt ratios and financial leverage ratios over the years, indicating an improvement in the company's ability to meet its long-term obligations and a stronger financial position.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 6.06 | 2.30 | 3.61 | 3.31 | 4.98 | 10.07 | 10.61 | 14.93 | 17.36 | 20.08 | 20.04 | 18.44 | 15.90 | 12.83 | 9.44 | 4.46 | 3.03 | 2.41 | 3.69 | 5.24 |
Based on the provided data, the interest coverage ratio of Westlake Chemical Corporation has fluctuated over the past few years. The interest coverage ratio reflects the company's ability to cover its interest payments with its operating income.
In March 2020, the interest coverage was 5.24, indicating that the company generated sufficient operating income to cover its interest expenses 5.24 times over. However, the ratio decreased to 3.69 in June 2020, which could indicate a slight increase in financial risk.
The interest coverage ratio further declined to 2.41 by September 2020, potentially raising concerns about the company's ability to meet its interest obligations comfortably. Subsequently, there was a slight improvement to 3.03 by December 2020, which was still below the ideal threshold.
From March 2021 to June 2022, there was a positive trend in the interest coverage ratio, indicating an improving ability to cover interest payments. The ratio reached its peak at 20.08 in September 2022, which suggests a strong financial position and ample earnings relative to interest expenses.
However, the interest coverage ratio began to decline from December 2022 to December 2024, signaling potential challenges in meeting interest obligations from operating income. The ratio dropped to 2.30 by September 2024, indicating a significant decrease in the company's ability to cover interest costs.
Overall, the fluctuating trend in Westlake Chemical Corporation's interest coverage ratio over the years highlights the importance of monitoring the company's financial health and its ability to manage its debt obligations effectively.