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GuruFocus has detected 7 Warning Signs with Mercury Systems Inc \$MRCY.
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Mercury Systems Inc (NAS:MRCY)
Inventory Turnover
0.83 (As of Sep. 2016)

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. 2016 was \$48.2 Mil. Mercury Systems Inc's average inventory for the quarter that ended in Sep. 2016 was \$58.4 Mil. Mercury Systems Inc's inventory turnover for the quarter that ended in Sep. 2016 was 0.83.

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. 2016 was 110.48.

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. 2016 was 60.76.

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. 2016 was 0.67.

Definition

Mercury Systems Inc's Inventory Turnover for the fiscal year that ended in Jun. 2016 is calculated as

 Inventory Turnover (A: Jun. 2016 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (A: Jun. 2016 ) / ( (Inventory (A: Jun. 2015 ) + Inventory (A: Jun. 2016 )) / 2 ) = 145.38 / ( (31.96 + 58.284) / 2 ) = 145.38 / 45.122 = 3.22

Mercury Systems Inc's Inventory Turnover for the quarter that ended in Sep. 2016 is calculated as

 Inventory Turnover (Q: Sep. 2016 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (Q: Sep. 2016 ) / ( (Inventory (Q: Jun. 2016 ) + Inventory (Q: Sep. 2016 )) / 2 ) = 48.205 / ( (58.284 + 58.443) / 2 ) = 48.205 / 58.3635 = 0.83

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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. 2016 is calculated as:

 Days Inventory = Average Inventory (Q: Sep. 2016 ) / Cost of Goods Sold (Q: Sep. 2016 ) * Days in Period = 58.3635 / 48.205 * 365 / 4 = 110.48

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. 2016 is calculated as:

 Days Sales of Inventory (DSI) = Average Inventory (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) * Days in Period = 58.3635 / 87.649 * 365 / 4 = 60.76

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. 2016 is calculated as

 Inventory to Revenue = Average Inventory (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = 58.3635 / 87.649 = 0.67

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Mercury Systems Inc Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Inventory Turnover 4.50 3.44 4.07 5.07 5.46 4.65 3.67 3.30 3.92 3.22

Mercury Systems Inc Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Inventory Turnover 0.87 0.96 0.99 1.01 1.02 0.90 0.89 1.00 1.02 0.83
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