Parsons Corp (PSN)

Debt-to-capital ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	745,963	743,605	591,922	539,998	249,353
Total stockholders’ equity	US$ in thousands	2,287,210	2,043,570	1,900,770	1,813,770	1,629,890
Debt-to-capital ratio		0.25	0.27	0.24	0.23	0.13

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $745,963K ÷ ($745,963K + $2,287,210K)
= 0.25

The debt-to-capital ratio of Parsons Corp has shown a general upward trend over the past five years, indicating increased reliance on debt financing relative to total capital.

In 2019, the ratio stood at 0.13, reflecting a relatively conservative capital structure with a lower proportion of debt to total capital. However, there has been a steady increase in the ratio since then, reaching 0.25 in 2023. This suggests that the company has been taking on more debt in relation to its total capital base.

While a higher debt-to-capital ratio can indicate increased financial risk due to higher interest obligations and potential solvency concerns, it can also be a strategic decision to leverage debt for growth opportunities or tax advantages.

It is important for stakeholders to monitor this ratio over time to assess Parsons Corp's ability to effectively manage its debt levels and maintain a sustainable capital structure. A continually rising ratio may warrant further scrutiny to ensure the company's long-term financial health and stability.