Hexcel Corporation (HXL)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.24 | 0.25 | 0.29 | 0.32 | 0.34 |
| Debt-to-capital ratio | 0.29 | 0.32 | 0.36 | 0.38 | 0.42 |
| Debt-to-equity ratio | 0.41 | 0.47 | 0.55 | 0.61 | 0.73 |
| Financial leverage ratio | 1.70 | 1.83 | 1.90 | 1.93 | 2.16 |
The solvency ratios of Hexcel Corp. have shown a generally improving trend over the past five years, indicating a strengthening financial position in terms of debt management and leverage.
The debt-to-assets ratio has decreased from 0.34 in 2019 to 0.24 in 2023, suggesting that the company is relying less on debt to finance its assets. This indicates a more conservative approach to borrowing and a stronger ability to cover its obligations with its assets.
The debt-to-capital ratio has also declined from 0.42 in 2019 to 0.29 in 2023, showing that the proportion of debt in the company's capital structure has decreased. This implies a lower financial risk and a higher level of financial stability.
Similarly, the debt-to-equity ratio has shown a decreasing trend from 0.73 in 2019 to 0.41 in 2023, indicating a lower reliance on debt funding relative to equity. A lower debt-to-equity ratio is generally considered favorable as it signifies a lower level of financial risk and greater solvency.
The financial leverage ratio has also decreased from 2.16 in 2019 to 1.70 in 2023, reflecting a reduction in the company's reliance on debt financing. This indicates a stronger equity position and a lower financial risk for the company.
Overall, the improving trend in Hexcel Corp.'s solvency ratios suggests that the company has been effectively managing its debt levels and leverage, leading to a more solid financial footing and enhanced ability to meet its financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.33 | 4.84 | 1.35 | 0.30 | 9.43 |
The interest coverage ratio of Hexcel Corp. has displayed fluctuations over the past five years. In 2023, the interest coverage ratio improved to 6.57, indicating that the company generated sufficient operating income to cover its interest expenses approximately 6.57 times. This represents a positive trend compared to the previous year when the ratio was 5.06.
In 2021 and 2020, the interest coverage ratios were 1.83 and 1.68, respectively, suggesting that the company's ability to cover interest expenses was relatively weaker during those years. However, the ratio significantly improved in 2019 to 9.43, reflecting a strong ability to meet interest obligations.
Overall, the recent improvement in the interest coverage ratio is a positive sign of Hexcel Corp.'s ability to manage its debt and interest obligations effectively. It is important for investors and creditors to monitor this ratio to assess the company's financial health and risk of default.