Hexcel Corporation (HXL)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	125,400	227,000	112,000	127,700	103,300
Short-term investments	US$ in thousands	—	4,300	6,200	—	44,000
Total current liabilities	US$ in thousands	353,500	315,900	329,800	247,600	183,100
Cash ratio		0.35	0.73	0.36	0.52	0.80

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($125,400K + $—K) ÷ $353,500K
= 0.35

Hexcel Corporation's cash ratio has exhibited fluctuations over the past five years. The cash ratio, which measures the company's ability to cover its short-term obligations with cash and cash equivalents, decreased from 0.80 in December 2020 to 0.52 in December 2021. This decline suggests a potential decrease in the company's liquidity position during that period.

Subsequently, the cash ratio further declined to 0.36 by December 2022, indicating a potential strain on Hexcel's ability to meet its short-term obligations solely with cash on hand. However, there was a notable improvement in the cash ratio in December 2023, increasing to 0.73, signaling a better liquidity position for the company.

Nevertheless, by December 2024, the cash ratio dropped again to 0.35, suggesting a potential liquidity challenge for Hexcel Corporation. Overall, the fluctuating trend in the cash ratio over the years indicates varying levels of liquidity and the need for the company to effectively manage its cash position to ensure it can meet its short-term financial obligations.