Parsons Corp (PSN)

Short-term

Turnover ratios

Inventory Turnover:
- Parsons Corp's inventory turnover has increased significantly from 1,081.91 in 2020 to 2,909.33 in 2021. This indicates that the company is selling its inventory more quickly in 2021 compared to 2020.

Receivables Turnover:
- The receivables turnover for Parsons Corp has remained relatively stable over the years, ranging between 4.39 in 2020 and 4.56 in 2023. This suggests that the company is efficient in collecting payments from its customers.

Payables Turnover:
- The payables turnover for Parsons Corp has been increasing steadily from 17.29 in 2020 to 30.82 in 2024. A higher payables turnover ratio indicates that the company is taking longer to pay its suppliers, which can be beneficial for cash flow management.

Working Capital Turnover:
- The working capital turnover for Parsons Corp has also shown a consistent increase from 5.95 in 2020 to 12.27 in 2024. This implies that the company is generating more revenue per dollar of working capital, reflecting efficient management of its working capital.

Overall, Parsons Corp's activity ratios demonstrate improvements in inventory turnover, stable receivables turnover, increasing payables turnover, and rising working capital turnover, indicating effective management of its resources and operations over the years.

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Average number of days

Parsons Corp's activity ratios provide insight into the management of the company's operating cycle and efficiency in converting inventory into sales and accounts receivable into cash.

1. Days of Inventory on Hand (DOH):
- In 2020, the company held inventory for an average of 0.34 days, indicating a quick turnover of inventory.
- This decreased to 0.13 days in 2021, signaling an even faster movement of inventory.
- The data for 2022, 2023, and 2024 is not available, making it difficult to assess changes in inventory management in those years.

2. Days of Sales Outstanding (DSO):
- In 2020, it took the company an average of 83.12 days to collect outstanding sales, reflecting a relatively long collection period.
- This improved to 76.76 days in 2021, suggesting more efficient collection efforts.
- The DSO increased slightly to 81.83 days in 2022, followed by further improvements to 80.09 days in 2023 and 81.23 days in 2024.

3. Number of Days of Payables:
- The company took an average of 21.11 days to pay its creditors in 2020.
- This decreased to 19.31 days in 2021, indicating a faster payment cycle.
- The trend continued with further reductions to 17.73 days in 2022, 16.96 days in 2023, and 11.84 days in 2024, suggesting more efficient management of payables.

Overall, Parsons Corp has shown improvements in inventory turnover, accounts receivable collection, and accounts payable management over the years analyzed, which is indicative of enhanced operational efficiency and cash flow management. It is important for the company to continue monitoring these ratios to ensure continued effectiveness in managing working capital and optimizing its operating cycle.

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Long-term

The fixed asset turnover of Parsons Corp has shown a consistent upward trend over the past five years, increasing from 32.25 in 2020 to 60.11 in 2024. This indicates that the company has been able to generate more revenues relative to its investment in fixed assets, demonstrating an improvement in the efficiency of utilizing its property, plant, and equipment.

In contrast, the total asset turnover ratio fluctuated slightly over the same period, with a slight decrease from 0.99 in 2020 to 0.95 in 2021, followed by an increasing trend to 1.22 in 2024. This suggests that the company has been more effective in utilizing its total assets to generate sales in recent years, reflecting an improvement in overall asset management and operational efficiency.

Overall, the upward trend in fixed asset turnover and the generally improving total asset turnover indicate that Parsons Corp has been successful in increasing sales relative to its investment in both fixed and total assets, showcasing efficient utilization of its assets to drive revenue growth and potentially enhance profitability in the long term.