Mercury Systems Inc — Earnings Quality Grade F
MRCY · Industrials
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 44 days, change -5 days YoY
AR growth -1.7% vs revenue growth 9.2%
Revenue 9.2%, CFFO 130.0%. Cash follows revenue
Expense Quality
Inventory -0.7% vs COGS 2.8%. Normal
CapEx growth -42.3% vs revenue 9.2%. Normal
SG&A/Gross Profit = 60.7%. Normal
Gross margin 27.9%, change +4.5pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
FCF $0.1B, FCF/NI = -3.14
Accruals ratio = -7.3%. Low accruals
Cash $0.3B covers only 48% of debt $0.6B
Balance Sheet Health
Goodwill+Intangibles $1.1B = 78% of equity. Over 50%
Debt/EBITDA = 9.9x (>4x). Interest coverage = -0.3x (<2x). Financial stress
Insufficient data
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -3% YoY. Normal
Manipulation Score
M-Score = -2.93 (< -2.22). Unlikely manipulator
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25