Hexcel Corporation (HXL)

Liquidity 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
Current ratio 2.21 2.76 2.75 2.74 2.74 3.03 2.93 2.78 2.23 2.42 2.55 2.77 2.49 2.76 2.63 2.59 2.93 3.28 3.86 3.36
Quick ratio 0.95 1.19 1.24 1.26 1.48 1.32 1.31 1.28 1.03 1.03 1.23 1.31 1.16 1.45 1.39 1.12 1.49 1.50 2.04 1.92
Cash ratio 0.35 0.33 0.28 0.32 0.73 0.39 0.38 0.36 0.36 0.32 0.37 0.46 0.52 0.66 0.67 0.37 0.80 0.64 1.17 1.06

Hexcel Corporation's current ratio has fluctuated over the years but generally remains above 2, indicating a strong ability to cover its short-term obligations with current assets. The ratio peaked at 3.86 in June 2020 but has decreased to 2.21 by December 2024.

The quick ratio, which considers only the most liquid assets, demonstrates a similar trend with values staying above 1 for most periods. A peak of 2.04 was observed in June 2020, with a subsequent decline to 0.95 by December 2024 signaling a potential decrease in the company's ability to meet its short-term obligations using only the most liquid assets.

The cash ratio, reflecting the firm's ability to pay off current liabilities with cash and cash equivalents, has generally remained below 1, indicating a reliance on other current assets to meet short-term obligations. The ratio ranged from a low of 0.28 in June 2024 to a high of 1.17 in June 2020, showcasing fluctuations in the company's cash position.

Overall, while Hexcel Corporation's current ratio suggests a favorable liquidity position, the decreasing trend in both the current ratio and quick ratio over the years may require further monitoring to ensure the company can effectively manage its short-term financial obligations.

Additional liquidity measure

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
Cash conversion cycle days 89.05 107.48 108.82 108.75 90.55 111.33 117.24 120.23 95.96 102.51 105.99 100.60 84.74 97.36 93.69 83.44 66.56 77.86 86.44 83.58

The cash conversion cycle of Hexcel Corporation has shown some fluctuations over the periods analyzed. The cycle started at 83.58 days on March 31, 2020, increased to 105.99 days on June 30, 2022, and then decreased to 89.05 days on December 31, 2024. This metric measures the time it takes for the company to convert its investments in inventory and other resources into cash from sales.

A longer cash conversion cycle can indicate inefficiencies in managing inventory, collecting receivables, and paying suppliers. On the other hand, a shorter cycle implies a more efficient operation. It is important for Hexcel Corporation to closely monitor and manage its cash conversion cycle to ensure optimal working capital management. Further analysis and comparison with industry benchmarks can provide additional insights into the company's operational efficiency and financial health.