Mercury Systems Inc (MRCY)
Cash conversion cycle
| Jun 30, 2025 | Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 184.81 | 196.28 | 187.85 | 190.45 | 188.09 | 192.65 | 197.25 | 207.58 | 187.30 | 195.05 | 183.19 | 173.18 | 166.33 | 165.91 | 161.17 | 153.35 | 150.14 | 161.87 | 167.84 | 164.07 |
| Days of sales outstanding (DSO) | days | 155.31 | 154.10 | 158.13 | 179.72 | 181.55 | 181.31 | 176.85 | 188.94 | 190.13 | 181.45 | 174.97 | 182.25 | 165.42 | 141.14 | 122.60 | 116.53 | 115.24 | 108.20 | 104.16 | 91.95 |
| Number of days of payables | days | 43.92 | 40.93 | 35.33 | 40.54 | 45.47 | 44.88 | 49.04 | 54.81 | 57.76 | 63.30 | 51.22 | 64.22 | 60.71 | 57.73 | 38.09 | 48.01 | 32.48 | 40.42 | 37.02 | 50.21 |
| Cash conversion cycle | days | 296.20 | 309.45 | 310.65 | 329.63 | 324.16 | 329.08 | 325.07 | 341.71 | 319.67 | 313.20 | 306.94 | 291.21 | 271.04 | 249.32 | 245.67 | 221.88 | 232.90 | 229.65 | 234.98 | 205.82 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 184.81 + 155.31 – 43.92
= 296.20
The analysis of Mercury Systems Inc's cash conversion cycle (CCC) over the specified period indicates a consistent upward trend from September 30, 2020, through June 30, 2025. At the outset, the CCC was approximately 205.82 days in September 2020, signifying the length of time it takes for the company to convert investments in inventory and accounts receivable into cash, net of accounts payable.
Throughout the following periods, the CCC demonstrated significant growth, reflecting elongation in the cycle’s components—namely receivables days, inventory days, and payable days. Notably, by September 30, 2021, the cycle had increased to approximately 221.88 days. This upward trajectory continued with fluctuations, reaching a peak of approximately 341.71 days in September 2023. The extended cycle during this period suggests that Mercury Systems experienced delays in collection, inventory turnover, or lengthening payment terms, ultimately decreasing the efficiency of working capital management.
Post-September 2023, a slight reduction is observed, with the CCC decreasing to around 310.65 days in December 2024 before trending lower slightly to approximately 296.20 days by June 2025. This fluctuation indicates some improvement or adjustment in operational or payment strategies, but the overall duration of the cycle remains substantially higher than the initial measurement in 2020.
In summary, the company’s cash conversion cycle has lengthened markedly over the analyzed period, implying increased working capital investment and potentially reduced operational efficiency in converting sales into cash. Continued monitoring of the individual components—accounts receivable, inventory management, and accounts payable—is necessary to interpret underlying causes and assess the implications for liquidity and operational performance.
Peer comparison
Jun 30, 2025