Hexcel Corporation (HXL)

Financial leverage ratio

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	2,918,500	2,846,300	2,921,900	2,907,300	2,837,300	2,775,700	2,819,400	2,853,500	2,819,400	2,872,600	2,917,400	2,893,500	2,917,800	2,972,100	3,222,500	3,433,300	3,128,600	3,155,200	3,195,100	3,166,000
Total stockholders’ equity	US$ in thousands	1,716,500	1,646,300	1,666,100	1,622,200	1,554,200	1,445,000	1,480,300	1,487,100	1,485,500	1,494,300	1,502,800	1,486,900	1,510,200	1,499,400	1,436,900	1,421,100	1,446,100	1,417,800	1,442,400	1,372,400
Financial leverage ratio		1.70	1.73	1.75	1.79	1.83	1.92	1.90	1.92	1.90	1.92	1.94	1.95	1.93	1.98	2.24	2.42	2.16	2.23	2.22	2.31

December 31, 2023 calculation

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

The financial leverage ratio of Hexcel Corp. has been consistently decreasing over the past eight quarters, indicating a trend towards lower financial leverage. The ratio decreased from 1.83 in Q4 2022 to 1.70 in Q4 2023.

A financial leverage ratio below 2 generally suggests that the company relies more on equity financing rather than debt financing to fund its operations and investments. This can be viewed positively as it indicates a lower risk of financial distress due to excessive debt obligations.

The stable decline in the financial leverage ratio over the quarters may signal that Hexcel Corp. is effectively managing its debt levels and reducing financial risk. Investors and creditors may view this trend favorably as lower financial leverage can lead to greater financial stability and flexibility for the company.