Hexcel Corporation (HXL)

Activity ratios

Short-term

Turnover ratios

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
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
Receivables turnover 8.91 7.22 6.44 6.55 7.49 7.29 6.49 6.06 6.92 7.26 6.15 6.45 8.02 6.97 7.02 7.55 11.72 11.60 10.56 8.44
Payables turnover 11.41 13.00 12.72 12.12 9.62 15.42 12.40 11.60 8.89 11.72 12.71 11.31 10.88 13.90 14.69 15.15 21.13 25.99 23.40 12.06
Working capital turnover 4.41 3.54 3.55 3.54 3.21 3.37 3.13 3.11 3.81 3.67 3.43 3.13 3.49 3.12 3.09 3.55 4.17 4.34 3.21 3.08

Based on the provided data, the analysis of Hexcel Corporation's activity ratios is as follows:

1. Inventory Turnover:
- The inventory turnover ratio has been gradually decreasing from 5.17 in March 31, 2020, to 4.56 in December 31, 2024. This indicates that the company is taking longer to sell its inventory, which may suggest potential issues with sales or inventory management efficiency.

2. Receivables Turnover:
- The receivables turnover ratio fluctuated over the years but generally showed a decreasing trend from 8.44 in March 31, 2020, to 8.91 in December 31, 2024. This could imply a slowdown in collecting receivables, which may impact cash flow and liquidity.

3. Payables Turnover:
- The payables turnover ratio varied, but it also exhibited a declining trend from 12.06 in March 31, 2020, to 11.41 in December 31, 2024. This indicates that the company is taking longer to pay its suppliers, which could affect relationships with vendors or cash management.

4. Working Capital Turnover:
- The working capital turnover ratio remained relatively stable over the years, ranging from 3.08 to 4.41. This suggests that the company efficiently utilizes its working capital to generate sales, indicating good working capital management.

In conclusion, the decreasing trends in inventory turnover, receivables turnover, and payables turnover raise concerns about operational efficiency and cash flow management for Hexcel Corporation, while the stable working capital turnover ratio reflects effective utilization of resources to support sales activities. Monitoring these activity ratios is crucial for the company to enhance operational performance and financial health.

Average number of days

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
Days of inventory on hand (DOH) days 80.06 85.02 80.82 83.14 79.78 84.91 90.41 91.50 84.27 83.41 75.38 76.27 72.80 71.26 66.53 59.18 52.70 60.43 67.46 70.62
Days of sales outstanding (DSO) days 40.98 50.54 56.69 55.71 48.73 50.10 56.26 60.21 52.73 50.25 59.32 56.60 45.48 52.36 52.01 48.35 31.14 31.47 34.57 43.23
Number of days of payables days 31.98 28.08 28.70 30.10 37.96 23.67 29.44 31.48 41.04 31.15 28.71 32.27 33.54 26.26 24.85 24.09 17.28 14.05 15.60 30.27

Based on the provided data, we can analyze the activity ratios of Hexcel Corporation as follows:

1. Days of Inventory on Hand (DOH):
- The average number of days Hexcel holds inventory increased from 70.62 days as of March 31, 2020, to 80.06 days as of December 31, 2024.
- The trend shows an overall increase in the days of inventory on hand, suggesting a potential inefficiency in managing inventory levels over the analyzed period.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding fluctuated over the years, ranging from 31.14 days as of December 31, 2020, to 56.69 days as of June 30, 2024.
- Generally, the increase in DSO from 31.14 days to 56.69 days indicates it took longer for Hexcel to collect revenue from sales, which may pose liquidity challenges or signal issues with credit policies.

3. Number of Days of Payables:
- The days of payables for Hexcel Corporation varied from 14.05 days as of September 30, 2020, to 41.04 days as of December 31, 2022.
- The trend shows fluctuations in the number of days Hexcel takes to pay its suppliers, with an overall increase over the years, potentially impacting cash flow management and supplier relationships.

In conclusion, the analysis of activity ratios for Hexcel Corporation highlights potential inefficiencies in inventory management, collection of receivables, and payment to suppliers. Monitoring and improving these ratios can help enhance operational effectiveness and financial performance in the future.

Long-term

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
Fixed asset turnover 1.18 1.13 1.11 1.07 1.05 1.04 0.99 0.97 0.93 0.90 0.86 0.80 0.74 0.70 0.66 0.68 0.78 0.93 1.06 1.18
Total asset turnover 0.69 0.65 0.64 0.63 0.60 0.61 0.57 0.55 0.54 0.53 0.51 0.48 0.46 0.43 0.41 0.43 0.50 0.58 0.63 0.66

The fixed asset turnover ratio for Hexcel Corporation has been fluctuating over the years, ranging from a low of 0.66 in March 2021 to a high of 1.18 in December 2024. This ratio indicates that the company generated between 0.66 and 1.18 in sales for every dollar invested in fixed assets during the respective periods. The upward trend in fixed asset turnover since March 2021 suggests improved efficiency in utilizing fixed assets to generate sales.

In comparison, the total asset turnover ratio has also shown variability, varying from 0.41 in June 2021 to 0.69 in December 2024. This ratio reflects the ability of Hexcel Corporation to generate sales in relation to its total assets. The increase in total asset turnover from 0.41 in June 2021 to 0.69 in December 2024 indicates a more efficient use of total assets to generate revenue over time.

Overall, the movement in both fixed asset turnover and total asset turnover ratios for Hexcel Corporation suggests an improvement in operational efficiency and asset utilization in generating sales over the analyzed period.