Hexcel Corporation (HXL)
Inventory turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 1,624,000 | 1,614,300 | 1,587,400 | 1,553,200 | 1,530,000 | 1,508,000 | 1,457,000 | 1,414,600 | 1,383,000 | 1,326,400 | 1,314,700 | 1,272,500 | 1,231,900 | 1,252,400 | 1,275,000 | 1,340,900 | 1,478,800 | 1,587,800 | 1,713,000 | 1,831,700 |
| Inventory | US$ in thousands | 356,200 | 376,000 | 351,500 | 353,800 | 334,400 | 350,800 | 360,900 | 354,600 | 319,300 | 303,100 | 271,500 | 265,900 | 245,700 | 244,500 | 232,400 | 217,400 | 213,500 | 262,900 | 316,600 | 354,400 |
| Inventory turnover | 4.56 | 4.29 | 4.52 | 4.39 | 4.58 | 4.30 | 4.04 | 3.99 | 4.33 | 4.38 | 4.84 | 4.79 | 5.01 | 5.12 | 5.49 | 6.17 | 6.93 | 6.04 | 5.41 | 5.17 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,624,000K ÷ $356,200K
= 4.56
The inventory turnover ratio measures the number of times a company's inventory is sold and replaced over a period. A higher inventory turnover ratio indicates efficient inventory management and potentially lower carrying costs.
Analyzing Hexcel Corporation's inventory turnover over the provided timeframe, we observe fluctuations in the ratio. The ratio was relatively stable around 5.0 to 6.0 from March 31, 2020, to June 30, 2021. However, there was a slight decrease in inventory turnover from September 30, 2021, to March 31, 2022, suggesting a longer holding period for inventory.
From March 31, 2022, to September 30, 2024, there was a gradual decline in the inventory turnover ratio, indicating potential inefficiencies in managing and selling inventory. The ratio dropped to around 4.0 by December 31, 2024. This trend may suggest overstocking, slow-moving inventory, or challenges in sales or production.
Overall, the decreasing trend in Hexcel Corporation's inventory turnover ratio raises concerns about inventory management efficiency and the need for the company to focus on optimizing inventory levels, improving demand forecasting, and streamlining supply chain operations to enhance liquidity and profitability.
Peer comparison
Dec 31, 2024
Dec 31, 2024