Parsons Corp (PSN)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		4.49	4.56	4.46	4.75	4.39
DSO	days	81.23	80.09	81.83	76.76	83.12

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.49
= 81.23

Days Sales Outstanding (DSO) is a crucial metric that indicates the average number of days it takes for a company like Parsons Corp to collect revenue after making a sale. Looking at Parsons Corp's DSO trend from 2020 to 2024, we can see a gradual improvement in its collection efficiency.

In December 2020, the company's DSO stood at 83.12 days, meaning it took approximately 83 days to collect its sales revenue. By December 2021, the DSO decreased to 76.76 days, indicating a more efficient collection process. However, there was a slight increase in DSO to 81.83 days by the end of 2022 before improving to 80.09 days in 2023. By the end of 2024, the DSO was 81.23 days, still showing a relatively stable collection period.

Overall, Parsons Corp has managed to reduce its DSO over the years, which is a positive sign of effective accounts receivable management. The company should continue to monitor and possibly further reduce its DSO to improve cash flow and liquidity in the future.