Parsons Corp (PSN)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	5,226,610	4,146,450	3,709,400	3,901,360	4,033,590
Payables	US$ in thousands	242,821	201,428	196,286	225,679	216,613
Payables turnover		21.52	20.59	18.90	17.29	18.62

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $5,226,610K ÷ $242,821K
= 21.52

The payables turnover ratio for Parsons Corp has shown a consistent increasing trend over the past five years. The ratio stood at 18.62 in 2019 and increased to 21.52 in 2023. This indicates that Parsons Corp has been able to manage its accounts payable more efficiently over the years. The higher payables turnover ratio suggests that the company is paying off its trade payables more frequently within a shorter period.

A higher payables turnover ratio may reflect strong vendor relations, efficient cash flow management, and effective working capital management. It can also indicate that the company is taking advantage of early payment discounts or negotiating favorable credit terms with its suppliers. Overall, the increasing trend in payables turnover demonstrates Parsons Corp's ability to effectively manage its payables and optimize its working capital utilization.