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Hexcel (Hexcel) ROC % : 6.69% (As of Mar. 2024)


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What is Hexcel ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Hexcel's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 6.69%.

As of today (2024-04-27), Hexcel's WACC % is 9.24%. Hexcel's ROC % is 7.24% (calculated using TTM income statement data). Hexcel earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Hexcel ROC % Historical Data

The historical data trend for Hexcel's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Hexcel ROC % Chart

Hexcel Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 12.56 -0.61 1.46 5.54 7.75

Hexcel Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.73 7.34 6.84 5.07 6.69

Hexcel ROC % Calculation

Hexcel's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

ROC % (A: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2022 ) + Invested Capital (A: Dec. 2023 ))/ count )
=215.3 * ( 1 - 11.03% )/( (2487.3 + 2457.4)/ 2 )
=191.55241/2472.35
=7.75 %

where

Hexcel's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

ROC % (Q: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2023 ) + Invested Capital (Q: Mar. 2024 ))/ count )
=211.6 * ( 1 - 21.34% )/( (2457.4 + 2518.6)/ 2 )
=166.44456/2488
=6.69 %

where

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Hexcel  (NYSE:HXL) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Hexcel's WACC % is 9.24%. Hexcel's ROC % is 7.24% (calculated using TTM income statement data). Hexcel earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


Hexcel ROC % Related Terms

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Hexcel (Hexcel) Business Description

Traded in Other Exchanges
Address
281 Tresser Boulevard, Two Stamford Plaza, 16th Floor, Stamford, CT, USA, 06901
Founded in 1948, Hexcel designs and manufactures a range of high-performance composite fibers, fabrics, resins, and structures for use in commercial aerospace, defense, and other industrial markets. These are engineered to be lighter than metal and perform under rigorous conditions in aircraft frames, wings, engines, and other components and subassemblies. The company's name derives from the six-sided honeycomb structures that lend many of its products their light weight and rigidity. Hexcel's biggest customers are Airbus (38% of 2022 sales) and Boeing (25% of prepandemic sales) and its respective subcontractors.
Executives
Gail E Lehman officer: See Remarks 801 CRESCENT CENTRE DRIVE, SUITE 600, FRANKLIN TN 37067
Marilyn Minus director C/O NORTHEASTERN UNIVERSITY, 360 HUNTINGTON AVENUE, MIE DEPT., 334SN, BOSTON MA 2115-5000
Thierry Merlot officer: See Remarks C/O HEXCEL CORPORATION, 281 TRESSER BLVD., STAMFORD CT 06901--326
Philippe Chevrier officer: See Remarks C/O HEXCEL CORPORATION, TWO STAMFORD PLAZA, 281 TRESSER BLVD., STAMFORD CT 06901
Gina Fitzsimons officer: See Remarks C/O HEXCEL CORPORATION, TWO STAMFORD PLAZA, 281 TRESSER BLVD., STAMFORD CT 06901
Robert George Hennemuth officer: See Remarks C/O HEXCEL CORPORATION, 281 TRESSER BLVD. 16TH FLOOR, STAMFORD CT 06901
Nick L Stanage officer: President 20807 DECATUR STREET, CASSOPOLIS MI 49031
Amy S Evans officer: See Remarks 2701 SPRUCE STREET, QUINCY IL 62301
Kimberly A. Hendricks officer: SVP, Corp. Controller & CAO 521 WEST 57TH STREET, NEW YORK NY 10019
Brett Raymond Schneider officer: President - Global Fibers C/O HEXCEL CORPORATION, 281 TRESSER BLVD., 16TH FLOOR, STAMFORD CT 06901
Timothy Swords officer: President, Industrial C/O HEXCEL CORPORATION, 281 TRESSER BLVD., STAMFORD CT 06901-3261
Pritchett Colleen officer: See Remarks C/O HEXCEL CORPORATION, 281 TRESSER BLVD., 16TH FLOOR, STAMFORD CT 06901
Jeffrey A Graves director C/O C&D TECHNOLOGIES, INC., 1400 UNION MEETING RD, BLUE BELL PA 19422
Patrick Winterlich officer: See Remarks HEXCEL CORPORATION, 281 TRESSER BLVD., STAMFORD CT 06901
Guy C Hachey director 5725 DELPHI DRIVE, TROY MI 48098

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