Mercury Systems Inc (MRCY)
Return on total capital
| 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 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -154,260 | -152,331 | -103,012 | -54,445 | -23,383 | 9,112 | 15,596 | 20,377 | 24,201 | 20,880 | 34,521 | 53,413 | 78,395 | 84,672 | 92,112 | 95,706 | 94,939 | 81,769 | 74,722 | 72,998 |
| Long-term debt | US$ in thousands | 591,500 | 616,500 | 616,500 | 576,500 | 511,500 | 511,500 | 511,500 | 511,500 | 451,500 | — | 451,500 | — | 200,000 | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,472,780 | 1,472,790 | 1,504,490 | 1,540,810 | 1,566,680 | 1,560,900 | 1,544,090 | 1,538,930 | 1,537,180 | 1,500,440 | 1,487,120 | 1,479,480 | 1,484,150 | 1,453,980 | 1,430,630 | 1,407,890 | 1,384,780 | 1,349,430 | 1,317,060 | 1,295,280 |
| Return on total capital | -7.47% | -7.29% | -4.86% | -2.57% | -1.13% | 0.44% | 0.76% | 0.99% | 1.22% | 1.39% | 1.78% | 3.61% | 4.65% | 5.82% | 6.44% | 6.80% | 6.86% | 6.06% | 5.67% | 5.64% |
June 30, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-154,260K ÷ ($591,500K + $1,472,780K)
= -7.47%
Return on total capital is a key financial ratio that indicates how effectively a company is generating profits from its invested capital. In the case of Mercury Systems Inc, the return on total capital has shown fluctuations over the past few quarters.
The ratio was negative in the most recent quarter, indicating that the company's profitability was insufficient to cover the cost of both debt and equity capital. This could raise concerns about the company's ability to generate returns for its investors.
Looking at the trend over the past few quarters, the return on total capital has generally been decreasing, with a few exceptions of temporary improvements. This suggests that the company may be facing challenges in maximizing its profitability relative to the amount of capital invested in its operations.
It is important for Mercury Systems Inc to closely monitor and address the factors leading to the declining return on total capital to ensure sustainable business performance and value creation for its stakeholders. A thorough analysis of the company's financial and operational strategies may be necessary to identify areas for improvement and potential opportunities for enhancing profitability in the future.
Peer comparison
Jun 30, 2024