Mercury Systems Inc (MRCY)
Cash conversion cycle
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 191.41 | 187.30 | 166.33 | 150.14 | 147.81 |
| Days of sales outstanding (DSO) | days | 48.70 | 46.75 | 53.37 | 50.88 | 55.18 |
| Number of days of payables | days | 46.28 | 57.76 | 60.71 | 32.48 | 34.76 |
| Cash conversion cycle | days | 193.83 | 176.29 | 158.99 | 168.54 | 168.24 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 191.41 + 48.70 – 46.28
= 193.83
The cash conversion cycle of Mercury Systems Inc has shown a fluctuating trend over the past five years. In 2024, the cash conversion cycle increased to 193.83 days compared to 176.29 days in 2023. This indicates that the company took longer to convert its resources into cash during the recent period.
The increase in the cash conversion cycle could suggest potential challenges in managing working capital efficiently, such as slower inventory turnover or longer accounts receivable collection periods. This could result in increased operating costs or liquidity constraints.
Comparing the current cash conversion cycle to previous years, the company's cycle has generally been in the range of 158 to 176 days, except for a slight increase in 2021 to 168.54 days. This suggests that fluctuations in the cycle are not uncommon for Mercury Systems Inc but may require further investigation to identify underlying causes and potential areas for improvement in working capital management.
Peer comparison
Jun 30, 2024