Hexcel Corporation (HXL)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	215,300	175,200	51,800	12,500	428,900
Long-term debt	US$ in thousands	699,400	723,300	822,400	925,500	1,050,600
Total stockholders’ equity	US$ in thousands	1,716,500	1,554,200	1,485,500	1,510,200	1,446,100
Return on total capital		8.91%	7.69%	2.24%	0.51%	17.18%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $215,300K ÷ ($699,400K + $1,716,500K)
= 8.91%

Hexcel Corp.'s return on total capital has varied over the past five years. In 2023, the return on total capital was 9.25%, showing an improvement from the previous year's 8.05%. This positive trend indicates that the company is generating a higher return relative to its total capital invested.

Comparing 2023 to 2021 and 2020, Hexcel Corp. has demonstrated substantial growth in its return on total capital, with a notable increase from 3.03% in 2021 to 9.25% in 2023. This improvement suggests that the company's capital investments are becoming more effective in generating returns for its stakeholders.

However, it is important to note a significant decline in return on total capital from 17.11% in 2019 to 2.89% in 2020. This sharp decrease could indicate challenges faced by the company in that particular year.

Overall, the upward trend in Hexcel Corp.'s return on total capital over the past few years indicates positive financial performance and effective capital utilization.