Parsons Corp (PSN)

Working capital turnover

		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	Dec 31, 2019
Revenue (ttm)	US$ in thousands	6,264,580	5,873,900	5,562,230	5,420,030	5,029,810	4,747,920	4,402,530	4,178,698	4,025,763	3,849,036	3,719,087	3,642,242	3,654,190	3,700,975	3,802,012	3,900,269	3,976,446	3,996,148	4,003,311	3,932,510
Total current assets	US$ in thousands	2,554,660	2,573,700	2,427,250	2,137,530	2,015,540	1,980,210	1,801,340	1,719,780	1,610,800	1,583,630	1,640,970	1,632,350	1,586,570	1,794,410	1,802,210	1,843,130	2,081,620	1,589,200	1,601,970	1,526,410
Total current liabilities	US$ in thousands	1,649,550	1,426,950	1,353,700	1,410,880	1,394,090	1,294,900	1,140,070	1,108,120	1,149,480	1,098,790	1,008,860	1,030,780	1,060,660	1,077,420	1,110,670	1,187,410	1,246,550	1,130,950	1,151,320	1,144,380
Working capital turnover		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	10.29

September 30, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $6,264,580K ÷ ($2,554,660K – $1,649,550K)
= 6.92

The working capital turnover of Parsons Corp has shown fluctuations over the past few years. The working capital turnover ratio indicates how efficiently the company is utilizing its working capital to generate revenue. A higher working capital turnover ratio is generally considered favorable as it implies that the company is generating more revenue per dollar of working capital.

In the most recent quarter, the working capital turnover ratio was 6.92, indicating that Parsons Corp generated $6.92 in revenue for every dollar of working capital it had. This represents an improvement compared to the previous quarter, where the ratio was 5.12. However, when comparing to the same quarter in the previous year, the ratio was 8.09, showing a decline in efficiency in utilizing working capital.

Looking at the trend over the past few quarters, there seems to be some variability in the working capital turnover ratio, with some quarters showing higher efficiency than others. It would be important for Parsons Corp to assess the reasons behind these fluctuations and strive for a more consistent and efficient use of working capital to drive profitability and sustainable growth.