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Mercury Systems Inc (NAS:MRCY)
Inventory Turnover
0.96 (As of Sep. 2014)

Inventory turnover measures how fast the company turns over its inventory within a year. It is calculated as cost of goods sold divided by average inventory. Mercury Systems Inc's cost of goods sold for the three months ended in Sep. 2014 was $30.1 Mil. Mercury Systems Inc's average inventory for the quarter that ended in Sep. 2014 was $31.2 Mil. Mercury Systems Inc's inventory turnover for the quarter that ended in Sep. 2014 was 0.96.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Mercury Systems Inc's days inventory for the three months ended in Sep. 2014 was 94.74.

Inventory can be measured by Days Sales of Inventory (DSI). Mercury Systems Inc's days sales of inventory (DSI) for the three months ended in Sep. 2014 was 52.68.

Inventory to revenue ratio determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. Mercury Systems Inc's inventory to revenue ratio for the quarter that ended in Sep. 2014 was 0.58.


Definition

Mercury Systems Inc's Inventory Turnover for the fiscal year that ended in Jun. 2014 is calculated as

Inventory Turnover (A: Jun. 2014 )
=Cost of Goods Sold (A: Jun. 2014 )/( (Inventory (A: Jun. 2013 )+Inventory (A: Jun. 2014 ))/ 2 )
=113.985/( (37.432+31.655)/ 2 )
=113.985/34.5435
=3.30

Mercury Systems Inc's Inventory Turnover for the quarter that ended in Sep. 2014 is calculated as

Inventory Turnover (Q: Sep. 2014 )
=Cost of Goods Sold (Q: Sep. 2014 )/( (Inventory (Q: Jun. 2014 )+Inventory (Q: Sep. 2014 ))/ 2 )
=30.062/( (31.655+30.771)/ 2 )
=30.062/31.213
=0.96

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

1. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Mercury Systems Inc's Days Inventory for the three months ended in Sep. 2014 is calculated as:

Days Inventory=Average Inventory (Q: Sep. 2014 )/Cost of Goods Sold (Q: Sep. 2014 )*Days in Period
=31.213/30.062*365 / 4
=94.74

2. Inventory can be measured by Days Sales of Inventory (DSI).

Mercury Systems Inc's Days Sales of Inventory for the three months ended in Sep. 2014 is calculated as:

Days Sales of Inventory=Average Inventory (Q: Sep. 2014 )/Revenue (Q: Sep. 2014 )*Days in Period
=31.213/54.061*365 / 4
=52.68

3. Inventory to Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

Mercury Systems Inc's Inventory to Revenue for the quarter that ended in Sep. 2014 is calculated as

Inventory to Revenue=Average Inventory (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=31.213 / 54.061
=0.58

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Be Aware

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate inventory turnover. An average inventory is a better indication.


Related Terms

Inventory, Cost of Goods Sold, Days Inventory, Revenue, Inventory to Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Mercury Systems Inc Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Inventory Turnover 6.165.034.503.444.075.075.464.903.673.30

Mercury Systems Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Inventory Turnover 1.280.880.790.790.610.800.820.890.720.96
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