Mercury Systems Inc (MRCY)

Mercury Systems Inc's liquidity ratios indicate the company's ability to meet its short-term obligations. The current ratio has been consistently above 1 over the past five years, with a slight decrease from 5.04 in 2020 to 4.07 in 2024. This suggests that Mercury Systems has more than enough current assets to cover its current liabilities.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has shown some variability over the years. The ratio increased from 0.84 in 2023 to 1.25 in 2024, indicating improved ability to meet short-term obligations without relying on inventory.

The cash ratio, which measures the company's ability to pay off current liabilities using only cash and cash equivalents, has fluctuated significantly. In 2020, the cash ratio was high at 1.82, but it decreased in subsequent years, reaching 0.77 in 2024. This downward trend may suggest a decrease in the company's ability to quickly settle short-term obligations using cash alone.

Overall, Mercury Systems Inc's liquidity ratios demonstrate a strong ability to meet short-term obligations, as indicated by the current and quick ratios. However, the decreasing trend in the cash ratio warrants further attention to ensure the company's continued liquidity position in the future.

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Additional liquidity measure

The cash conversion cycle of Mercury Systems Inc has shown a fluctuating trend over the past five years. In the most recent fiscal year ending on June 30, 2024, the company's cash conversion cycle increased to 193.83 days from 176.29 days in the previous year. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during this period.

Comparing to the data from the prior years, there was a significant increase from the fiscal year ending June 30, 2022, where the cash conversion cycle was at 158.99 days. However, in fiscal year 2021, the cash conversion cycle was slightly higher at 168.54 days, showing a minor deterioration compared to the performance in 2024. Additionally, in fiscal year 2020, the cash conversion cycle was comparable at 168.24 days.

Overall, the increasing trend in the cash conversion cycle for Mercury Systems Inc over the past few years suggests a potential inefficiency in managing its working capital and operations. The company may need to focus on improving inventory management, speeding up accounts receivable collection, and optimizing payment cycles to enhance its cash conversion efficiency in the future.