Parsons Corp (PSN)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	6,706,840	5,418,280	4,176,290	3,641,260	3,902,880
Total current assets	US$ in thousands	2,462,400	2,137,530	1,719,780	1,632,350	1,843,130
Total current liabilities	US$ in thousands	1,915,640	1,410,880	1,108,120	1,030,780	1,187,410
Working capital turnover		12.27	7.46	6.83	6.05	5.95

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $6,706,840K ÷ ($2,462,400K – $1,915,640K)
= 12.27

Based on the data provided, Parsons Corp's working capital turnover has shown a steady increase over the years, reflecting improving efficiency in utilizing its working capital. The working capital turnover ratio has increased from 5.95 in December 31, 2020, to 12.27 in December 31, 2024.

This indicates that Parsons Corp is generating significantly more revenue relative to its working capital investment by efficiently managing its operating liquidity. A higher working capital turnover ratio implies that the company is effectively using its current assets and liabilities to support its operations and sales activities.

The increasing trend in the working capital turnover ratio reflects positively on Parsons Corp's operational efficiency and ability to convert its working capital into revenues. It signifies that the company is managing its capital resources effectively and may be improving its cash flow position by minimizing excess working capital tied up in operations.

Overall, the improving trend in the working capital turnover ratio indicates that Parsons Corp is effectively managing its working capital to drive operational performance and maximize its financial resources.