Parsons Corp (PSN)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Inventory turnover — — — — — — — — — — 4,355.82 — 2,909.33 — — — 826.24 — — —
Receivables turnover 4.36 4.30 4.21 4.04 4.56 4.09 3.79 4.28 4.46 4.29 3.98 4.36 4.76 4.48 4.51 4.37 4.39 3.87 4.19 4.09
Payables turnover 30.82 20.45 22.92 20.20 21.52 18.45 19.55 20.73 20.59 19.98 19.91 23.99 18.90 14.81 14.71 13.16 13.20 14.37 14.38 13.13
Working capital turnover 11.91 6.92 5.12 5.18 7.46 8.09 6.93 6.66 6.83 8.73 7.94 5.88 6.05 6.95 5.16 5.50 5.95 4.76 8.72 8.88

Inventory Turnover Ratio:

The inventory turnover ratio for Parsons Corp has shown significant improvement over the years. It was 826.24 in December 2020, then rose to 2,909.33 in December 2021, and further increased to 4,355.82 in June 2022. This indicates that the company is managing its inventory efficiently and selling its products at a faster rate.

Receivables Turnover Ratio:

The receivables turnover ratio has been fluctuating but generally maintaining a healthy range. It was around 4 in early 2020, peaked at 4.76 in December 2021, and then settled around 4.21 in June 2024. This indicates that Parsons Corp is collecting its accounts receivables efficiently, although there was a slight dip in collection efficiency in mid-2022.

Payables Turnover Ratio:

The payables turnover ratio for Parsons Corp has shown a mixed trend. It was gradually increasing from 13.13 in March 2020 to 30.82 in December 2024. The increasing trend may indicate that the company is managing its payables effectively or negotiating better credit terms with suppliers.

Working Capital Turnover Ratio:

The working capital turnover ratio has fluctuated over the years, reflecting changes in the company's efficiency in utilizing its working capital. The ratio was highest in the early years but declined in the following periods. It stood at 11.91 in December 2024, indicating that the company generated $11.91 in revenue for each dollar of working capital invested.

Overall, the activity ratios suggest that Parsons Corp has been effectively managing its inventory, receivables, payables, and working capital, contributing to its operational efficiency and financial performance.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Days of inventory on hand (DOH) days — — — — — — — — — — 0.08 — 0.13 — — — 0.44 — — —
Days of sales outstanding (DSO) days 83.68 84.84 86.80 90.29 80.06 89.28 96.34 85.30 81.78 85.06 91.82 83.65 76.74 81.49 81.00 83.53 83.18 94.36 87.01 89.21
Number of days of payables days 11.84 17.84 15.92 18.07 16.96 19.78 18.67 17.61 17.73 18.27 18.33 15.22 19.31 24.64 24.82 27.74 27.65 25.39 25.39 27.81

The activity ratios of Parsons Corp can provide insight into its operational efficiency and effectiveness in managing its working capital.

1. Days of Inventory on Hand (DOH):
- Parsons Corp gradually decreased its days of inventory on hand from 0.44 days on December 31, 2020, to 0.08 days on June 30, 2022, indicating a more efficient management of inventory levels during this period. However, the data is not available for the remaining quarters through December 31, 2024, which limits a comprehensive analysis of inventory management efficiency over time.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding fluctuated over the quarters but remained relatively stable between 76.74 days on December 31, 2021, and 96.34 days on June 30, 2023. Ideally, a lower DSO indicates faster collection of accounts receivable and better cash flow management. Parsons Corp should aim to reduce its DSO to improve its liquidity position.

3. Number of Days of Payables:
- The number of days of payables decreased consistently over time from 27.81 days on March 31, 2020, to 11.84 days on December 31, 2024. A decreasing trend in the days of payables suggests that Parsons Corp is paying its suppliers more quickly. While this may indicate good relationships with suppliers, it could also imply increased cash outflows. The company should strike a balance between timely payments and managing cash effectively.

Overall, analyzing these activity ratios provides valuable insights into Parsons Corp's operational efficiency, working capital management, and potential areas for improvement.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Fixed asset turnover 58.35 61.91 59.81 56.47 54.77 50.63 49.84 46.46 42.23 42.59 39.08 37.98 34.96 34.51 33.46 32.91 32.23 32.73 32.03 32.13
Total asset turnover 1.19 1.15 1.12 1.09 1.13 1.06 1.05 1.03 1.00 0.98 0.94 0.98 0.95 0.96 0.96 0.98 0.99 1.01 1.16 1.15

The Fixed Asset Turnover ratio for Parsons Corp has shown a steady improvement over the years, indicating that the company is generating more revenue relative to its investment in fixed assets. The ratio has increased from 32.13 in March 2020 to 58.35 in December 2024. This suggests that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the Total Asset Turnover ratio has fluctuated slightly over the same period but generally shows an increasing trend. The ratio was 1.15 in March 2020 and improved to 1.19 by December 2024. This indicates that Parsons Corp is becoming more efficient in generating sales from its total assets.

Overall, the increase in both Fixed Asset Turnover and Total Asset Turnover ratios reflects positively on the company's operational efficiency and management of assets to drive revenue growth.