Parsons Corp (PSN)

Liquidity ratios

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
Current ratio 1.55 1.80 1.79 1.52 1.45 1.53 1.58 1.55 1.40 1.44 1.63 1.58 1.50 1.67 1.62 1.55 1.67 1.41 1.39 1.33
Quick ratio 1.22 1.35 1.33 1.04 1.03 1.11 1.10 1.08 0.94 1.00 1.13 1.08 1.03 1.21 1.14 1.16 1.32 0.96 0.96 0.95
Cash ratio 0.34 0.37 0.31 0.19 0.15 0.14 0.19 0.24 0.13 0.12 0.28 0.33 0.26 0.45 0.36 0.41 0.50 0.12 0.11 0.17

The liquidity ratios of Parsons Corp indicate the company's ability to meet its short-term obligations. The current ratio has shown some volatility over the periods, ranging from 1.52 to 1.80, with an average around 1.55. This suggests that the company has generally been able to cover its current liabilities with its current assets, although there have been fluctuations in liquidity levels.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also exhibited some variability, ranging from 1.03 to 1.35. While the quick ratio is generally lower than the current ratio, it still indicates that Parsons Corp has a reasonable ability to meet its short-term liabilities with its most liquid assets.

The cash ratio, which focuses solely on cash and cash equivalents, has ranged from 0.12 to 0.50, with an average around 0.28. This ratio highlights the company's ability to cover its current liabilities with its cash reserves alone, and indicates that Parsons Corp has maintained a decent level of cash on hand to meet its short-term obligations.

Overall, Parsons Corp's liquidity ratios suggest that the company has managed its short-term liquidity reasonably well, with fluctuations in the ratios possibly indicating periodic changes in working capital management or cash flow dynamics. Monitoring these ratios over time can provide insights into the company's liquidity position and its ability to weather short-term financial challenges.

Additional liquidity measure

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
Cash conversion cycle days 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 58.07

The cash conversion cycle for Parsons Corp has displayed some fluctuations over the given periods. The company's cash conversion cycle, which represents the time it takes to convert inputs into cash flows, has ranged from a low of 55.80 days to a high of 77.67 days.

Analyzing the trend, we observe that the cash conversion cycle peaked at 77.67 days in June 2023, indicating a longer period between the company's cash outflows for materials and labor and its cash inflows from sales. This prolonged cycle may signify inefficiencies in inventory management, accounts receivable collection, or accounts payable management during that period.

On the other hand, the cycle reached its lowest point of 55.80 days in March 2021, reflecting a more efficient conversion of resources into cash. This improvement may suggest streamlined operational processes, effective working capital management, or enhanced sales collections practices.

Overall, fluctuations in the cash conversion cycle for Parsons Corp highlight the company's ability to manage its cash flow effectively. Monitoring this metric and identifying the underlying factors contributing to changes can assist in optimizing working capital management and enhancing overall financial performance.