Mercury Systems Inc (MRCY)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.65 | 1.66 | 1.64 | 1.62 | 1.77 | 1.61 | 1.62 | 1.56 | 1.53 | 1.53 | 1.52 | 1.53 | 1.50 | 1.51 | 1.50 | 1.33 | 1.32 | 1.31 | 1.36 | 1.17 |
The solvency ratios for Mercury Systems Inc. over the observed periods demonstrate a consistent absence of reported debt, as evidenced by the zero values across the debt-to-assets, debt-to-capital, and debt-to-equity ratios from September 30, 2020, through June 30, 2025. This indicates that the company has maintained a debt-free capital structure during this timeframe, relying predominantly on internal financing or equity rather than external debt obligations.
The data reveal that the debt-to-assets ratio remains at 0.00 for all periods, signifying no utilization of liabilities in relation to total assets. Similarly, the debt-to-capital and debt-to-equity ratios are also uniformly zero, confirming the absence of borrowing leverage relative to the company's capital or equity base.
In contrast, the financial leverage ratio, which measures the extent of financial support from debt relative to equity, exhibits variability over the same periods. Starting at 1.17 in September 2020, it gradually increases to a peak of 1.77 in June 2024, and then stabilizes around 1.65 by June 2025. This suggests that, despite the absence of reported debt, the company’s overall leverage (including other forms of financial support or possibly accounting adjustments) has experienced modest fluctuations, potentially reflecting changes in capital structure or reclassification of financial components over time.
Overall, Mercury Systems Inc. appears to operate in a virtually debt-free manner regarding traditional solvency ratios, with the notable exception of a gradually increasing measure of financial leverage that does not correspond to debt levels. This indicates a conservative approach to leveraging and external borrowing, contributing to a solid solvency profile characterized by minimal direct financial obligations.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -0.51 | -1.54 | -2.44 | -3.51 | -4.41 | -4.59 | -3.37 | -1.91 | -0.93 | 1.01 | 2.51 | 4.41 | 8.07 | 10.31 | 16.26 | 38.06 | 78.72 | 58.88 | 88.53 | 73.80 |
The interest coverage ratio for Mercury Systems Inc. exhibits a significant declining trend over the specified period, indicating a deterioration in the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT).
Initially, at the end of September 2020, the ratio was robust at 73.80, suggesting that the company's EBIT was nearly 74 times its interest expense, reflecting strong coverage. This high level persisted through December 2020 with an even higher ratio of 88.53, implying exceptional capacity to cover interest payments during this period.
However, subsequent quarters experienced a steady decrease in the ratio. By March 2021, the ratio declined to 58.88, and further decreased to 38.06 by September 2021, indicating a weakening capacity but still a comfortable margin of interest coverage. The downward trend continued sharply through 2022, with ratios of 16.26 in December 2021 and 10.31 in March 2022. The decrease accelerated in 2022, with ratios falling to 8.07 in June and 4.41 in September, signaling mounting concern regarding the company's ability to cover interest expenses solely from operational earnings.
By the end of December 2022, the ratio further declined to 2.51, approaching a low threshold where earnings barely suffice to meet interest obligations. The subsequent quarters reflected continued deterioration, with the ratio turning negative in March 2023 at -1.91, and deepening negative through June 2023 (-3.37) and September 2023 (-4.59). The negative interest coverage indicates that the company's EBIT is insufficient to cover interest expenses, and additional sources of funds or debt restructuring may be necessary.
The negative trend persisted into 2024 and 2025, with the ratios remaining below zero. The data show that by March 2024, interest coverage was -4.59, and although there was slight improvement afterward, the ratios remained negative, reaching -0.51 in June 2025. This persistent negative interest coverage ratio signals ongoing challenges in generating sufficient operating earnings to cover interest costs, raising concerns over financial stability and increased risk of insolvency if the trend continues.
In summary, Mercury Systems Inc. experienced a substantial decline in its interest coverage ratio from a high of over 88 in late 2020 to consistently negative figures from early 2023 onward. This decline indicates a transition from strong financial health to a position where operational earnings are insufficient to cover interest expenses, reflecting significant financial stress and the need for strategic financial adjustments.