Hexcel Corporation (HXL)

Cash conversion cycle

		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
Cash conversion cycle	days	89.05	107.48	108.82	108.75	90.55	111.33	117.24	120.23	95.96	102.51	105.99	100.60	84.74	97.36	93.69	83.44	66.56	77.86	86.44	83.58

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.06 + 40.98 – 31.98
= 89.05

The cash conversion cycle for Hexcel Corporation has fluctuated over the years, indicating variations in the company's efficiency in managing its cash flow and working capital.

From March 31, 2020, to September 30, 2020, the company managed to reduce its cash conversion cycle from 83.58 days to 77.86 days, showing improved efficiency in converting its investments in inventory and accounts receivable into cash.

However, from September 2020 to March 2021, there was a slight increase in the cash conversion cycle to 83.44 days. Subsequently, the cycle increased further to 93.69 days by June 30, 2021, and continued to rise in the following quarters, reaching a peak of 120.23 days by March 31, 2023.

The trend reversed from March 31, 2023, to December 31, 2024, as the cash conversion cycle gradually decreased. By the end of December 2024, the cycle had improved to 89.05 days.

Overall, Hexcel Corporation experienced fluctuations in its cash conversion cycle over the years, highlighting the importance of monitoring and effectively managing working capital to enhance liquidity and efficiency in its operations.