Parsons Corp (PSN)
Cash conversion cycle
| 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 |
| Cash conversion cycle | days | 71.84 | 66.99 | 70.87 | 72.23 | 63.10 | 69.50 | 77.67 | 67.69 | 64.05 | 66.79 | 73.57 | 68.44 | 57.55 | 56.86 | 56.18 | 55.80 | 55.97 | 68.97 | 61.62 | 61.41 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 83.68 – 11.84
= 71.84
The cash conversion cycle of Parsons Corp has displayed fluctuations over the analyzed period, ranging from a low of 55.80 days to a high of 77.67 days. The company's cash conversion cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle typically indicates more efficient management of working capital and faster cash generation.
From a trend perspective, we observe a general increase in the cash conversion cycle from the beginning of the period, with intermittent fluctuations. The cycle peaked around mid-2023 before showing a slight decline towards the end of the analyzed period.
Analyzing the cash conversion cycle can provide insights into how efficiently the company is managing its operations, inventory levels, and cash flow. Strategies to improve the cash conversion cycle may involve streamlining inventory management, negotiating better payment terms with suppliers, and enhancing the speed of collections from customers.
Overall, monitoring and managing the cash conversion cycle is essential for optimizing working capital efficiency and ensuring the company's liquidity position remains strong.
Peer comparison
Dec 31, 2024