Hexcel Corporation (HXL)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	864,200	734,400	616,300	535,900	704,900
Total current liabilities	US$ in thousands	315,900	329,800	247,600	183,100	322,600
Current ratio		2.74	2.23	2.49	2.93	2.19

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $864,200K ÷ $315,900K
= 2.74

Hexcel Corp.'s current ratio has exhibited some fluctuations over the past five years. The current ratio measures the company's ability to cover its short-term financial obligations with its current assets. The ratio of 2.74 at the end of 2023 indicates that Hexcel Corp. had $2.74 in current assets for every $1 of current liabilities, reflecting a strong liquidity position.

Comparing this to prior years, we see that the current ratio was 2.23 in 2022, 2.49 in 2021, 2.93 in 2020, and 2.19 in 2019. The downward trend from 2020 to 2022 raised concerns as the ratio dropped below 2, potentially indicating difficulties in meeting short-term obligations. However, the subsequent increase in 2023 suggests an improvement in liquidity management.

While a current ratio above 1 generally indicates a healthy liquidity position, it is essential to consider industry norms and historical trends for a more comprehensive analysis. Overall, Hexcel Corp.'s current ratio of 2.74 at the end of 2023 demonstrates a strong ability to cover short-term obligations with current assets.