Parsons Corp (PSN)

Parsons Corp's solvency ratios demonstrate a consistent and relatively stable financial position over the five-year period from 2020 to 2024. The Debt-to-assets ratio has shown a slight increase from 0.14 in 2020 to 0.16 in 2023 before dropping to 0.14 in 2024, indicating that the company's debt as a percentage of its total assets has remained relatively low.

Similarly, the Debt-to-capital ratio has followed a similar trend, with a gradual increase from 0.23 in 2020 to 0.27 in 2022, before decreasing to 0.24 in 2024. This indicates that the company's debt relative to its total capital has been well managed throughout the period.

The Debt-to-equity ratio has also shown a moderate increase from 0.30 in 2020 to 0.36 in 2022, before dropping to 0.32 in 2024. This ratio implies that the company relies more on equity financing compared to debt financing, which is a positive indicator of financial stability.

Finally, the Financial leverage ratio has exhibited some variability, decreasing from 2.17 in 2020 to 2.02 in 2021, before increasing to 2.27 in 2024. This ratio indicates the extent to which the company is using debt to finance its operations relative to its equity. Overall, Parsons Corp's solvency ratios reflect a sound financial position with prudent debt management practices in place.

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Coverage ratios

The interest coverage ratio for Parsons Corp has shown fluctuations over the past five years. In December 2020, the interest coverage ratio was 7.73, indicating that the company's earnings before interest and taxes were 7.73 times greater than its interest expenses. However, this ratio decreased to 5.96 in December 2021, suggesting a potential decrease in the company's ability to cover its interest payments with operating income.

Subsequently, in December 2022, the interest coverage ratio improved to 6.88, indicating a better ability to meet interest obligations compared to the previous year. By December 2023, the interest coverage ratio further increased to 7.90, demonstrating a continued strengthening of the company's ability to cover interest charges.

In December 2024, the interest coverage ratio slightly decreased to 7.05, but it remains at a healthy level overall. The overall trend suggests that Parsons Corp has been able to manage its interest expenses effectively, with some fluctuations in the ratio over the years. It is important for investors and creditors to monitor this ratio to assess the company's financial health and ability to meet its debt obligations.