Mercury Systems Inc (MRCY)
Cash conversion cycle
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 191.41 | 187.30 | 166.33 | 150.14 |
| Days of sales outstanding (DSO) | days | 155.31 | 181.55 | 190.13 | 165.42 | 115.24 |
| Number of days of payables | days | 43.92 | 46.28 | 57.76 | 60.71 | 32.48 |
| Cash conversion cycle | days | 111.39 | 326.69 | 319.67 | 271.04 | 232.90 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 155.31 – 43.92
= 111.39
The analysis of Mercury Systems Inc’s cash conversion cycle (CCC) over the period from June 30, 2021 to June 30, 2025 reveals notable fluctuations indicative of shifts in operating efficiencies and working capital management practices.
Initially, as of June 30, 2021, the company's cash conversion cycle was approximately 232.90 days. This figure increased markedly over the subsequent years, reaching 271.04 days by June 30, 2022, and further rising to 319.67 days as of June 30, 2023. The continued elongation of the CCC suggests that the company experienced growing delays in converting its investments in inventory and receivables into cash, possibly due to extended collection periods, increased inventory holdings, or clients taking longer to pay.
In the year ending June 30, 2024, the cash conversion cycle reached approximately 326.69 days, which signifies a further lengthening relative to the prior periods. This sustained increase points to ongoing challenges in receivables collection, inventory turnover, or both, impacting liquidity and operational efficiency.
However, in the most recent period examined, as of June 30, 2025, the CCC notably decreased to approximately 111.39 days. This substantial reduction suggests a significant improvement in working capital management, potentially stemming from enhanced receivables collection, inventory reduction strategies, or a combination of both. The sharp decline indicates that the company may have addressed prior inefficiencies, leading to a shorter cycle for converting inventory and receivables into cash, thereby improving liquidity and operational cash flows.
Overall, the trend of Mercury Systems Inc’s cash conversion cycle demonstrates periods of deterioration followed by a pronounced recovery, highlighting strategic shifts in operational processes and working capital policies that have markedly impacted the company's cash flow timing over the analyzed period.
Peer comparison
Jun 30, 2025