Hexcel Corporation (HXL)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	2,918,500	2,837,300	2,819,400	2,917,800	3,128,600
Total stockholders’ equity	US$ in thousands	1,716,500	1,554,200	1,485,500	1,510,200	1,446,100
Financial leverage ratio		1.70	1.83	1.90	1.93	2.16

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,918,500K ÷ $1,716,500K
= 1.70

Hexcel Corp.'s financial leverage ratio has exhibited a declining trend over the past five years, decreasing from 2.16 in 2019 to 1.70 in 2023. This indicates that the company has been reducing its reliance on debt financing in relation to its equity over the period. A decreasing financial leverage ratio is generally viewed positively as it signifies a lower level of financial risk and potential stress on the company's financial position from debt obligations. It suggests that Hexcel Corp. has been managing its capital structure prudently, balancing debt and equity to maintain a stable financial position. However, it is important to consider that a lower financial leverage ratio may also indicate potentially missed opportunities to leverage inexpensive debt financing for growth or expansion. Overall, the decreasing trend in Hexcel Corp.'s financial leverage ratio signals improved financial stability and a more conservative approach to capital structure in recent years.