Mercury Systems Inc (MRCY)
Return on total capital
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -101,654 | -154,260 | -23,383 | 70,476 | 96,199 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,473,460 | 1,472,780 | 1,566,680 | 1,537,180 | 1,484,150 |
| Return on total capital | -6.90% | -10.47% | -1.49% | 4.58% | 6.48% |
June 30, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-101,654K ÷ ($—K + $1,473,460K)
= -6.90%
The analysis of Mercury Systems Inc.'s return on total capital over the specified periods reveals a trend of declining profitability and increasing challenges in generating returns relative to the total capital invested in the company. As of June 30, 2021, the return on total capital stood at 6.48%, indicating a relatively healthy level of efficiency in utilizing its capital base to generate earnings. However, by June 30, 2022, this figure decreased significantly to 4.58%, suggesting a deterioration in operational performance or increased capital costs.
The downward trajectory continued into June 30, 2023, with the return turning negative at -1.49%, signaling that the company was not only failing to generate positive returns from its total capital but also incurring losses relative to its capital investments. The negative trend worsened further by June 30, 2024, reaching -10.47%, which indicates a substantial decline in efficiency and potential financial distress. Although there was a slight improvement projected for June 30, 2025, with the return expected to decrease to -6.90%, it nonetheless remains in negative territory, reflecting ongoing challenges in capital deployment and profitability.
Overall, the data illustrates a deterioration in Mercury Systems Inc.'s ability to generate positive returns on its total capital base over the analyzed period, moving from a modestly positive figure to increasingly significant losses. This trend warrants attention to underlying operational, financial, or market factors that might be contributing to the declining performance and negative returns in recent years.
Peer comparison
Jun 30, 2025