Hexcel Corporation (HXL)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,530,100	1,383,000	1,235,400	1,443,600	1,880,900
Inventory	US$ in thousands	334,400	319,300	245,700	213,500	333,100
Inventory turnover		4.58	4.33	5.03	6.76	5.65

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,530,100K ÷ $334,400K
= 4.58

The inventory turnover ratio for Hexcel Corp. has fluctuated over the past five years. In 2023, the inventory turnover ratio was 4.05, indicating that the company converted its inventory into sales approximately 4.05 times during the year. This was slightly higher than the ratio of 3.82 in 2022 but lower than the ratios of 4.37 in 2021, 5.91 in 2020, and 5.15 in 2019.

A decreasing trend in inventory turnover ratios may suggest that Hexcel Corp. is taking longer to sell its inventory, which could potentially lead to higher carrying costs or obsolete inventory. Conversely, an increasing trend in inventory turnover ratios could indicate more efficient inventory management and potentially better sales performance.

It is important for Hexcel Corp. to analyze the reasons behind the fluctuations in its inventory turnover ratios and consider strategies to optimize inventory management, such as improving demand forecasting, reducing excess inventory, or streamlining production processes. This analysis can help the company improve its working capital efficiency and overall financial performance in the long run.