Hexcel Corporation (HXL)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		7.49	6.92	8.02	11.65	10.15
DSO	days	48.73	52.73	45.48	31.34	35.96

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.49
= 48.73

Hexcel Corp.'s days of sales outstanding (DSO) measures the average number of days it takes for the company to collect payment from its customers after making a sale. A lower DSO indicates that the company is able to collect payments more quickly, which can improve cash flow and liquidity. Conversely, a higher DSO may indicate potential issues with collections or customer credit.

From the data provided, we observe a trend in Hexcel Corp.'s DSO over the past five years. In 2023, the DSO was 47.88 days, down from 51.52 days in 2022 but higher than the 44.17 days in 2021. The DSO has increased significantly from 30.47 days in 2020 and 35.27 days in 2019.

The fluctuation in DSO could be attributed to changes in the company's sales policies, customer payment behavior, or economic conditions. It is important for Hexcel Corp. to monitor and manage its DSO to ensure efficient cash flow management and timely collection of accounts receivable. Further analysis and comparison with industry benchmarks may provide additional insights into the effectiveness of Hexcel Corp.'s credit and collection practices.