Parsons Corp (PSN)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 272,943 | 262,539 | 342,608 | 483,609 | 182,688 |
| Short-term investments | US$ in thousands | — | — | 1,275 | 3,606 | 12,686 |
| Receivables | US$ in thousands | 1,188,850 | 936,290 | 765,801 | 888,800 | 890,451 |
| Total current liabilities | US$ in thousands | 1,410,880 | 1,108,120 | 1,030,780 | 1,187,410 | 1,144,380 |
| Quick ratio | 1.04 | 1.08 | 1.08 | 1.16 | 0.95 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($272,943K
+ $—K
+ $1,188,850K)
÷ $1,410,880K
= 1.04
The quick ratio, also known as the acid-test ratio, measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio above 1 indicates that the company has enough liquid assets to cover its current liabilities.
Analyzing the trend in Parsons Corp's quick ratio over the past five years, we observe a fluctuating pattern. In 2019, the quick ratio was at 0.95, which indicates that the company may have had difficulty meeting its short-term obligations with its liquid assets alone. However, in the following years, the quick ratio improved, reaching 1.16 in 2020, 1.08 in 2021 and 2022, and 1.04 in 2023.
Although the quick ratio has generally remained above 1 in recent years, suggesting a favorable position in terms of liquidity, the slight decrease from 2022 to 2023 may raise some concerns. It is important for Parsons Corp to monitor its quick ratio closely to ensure that it maintains a sufficient level of liquidity to meet its short-term liabilities effectively.
Peer comparison
Dec 31, 2023