Virtual Machines can be deleted manually, however we recommend to do it using Delete VM Wizard that detects all the files that make up Virtual Machine and are connected to it.
The Wizard helps to remove the following Virtual Machine components and associated files:
.iso images connected to the Virtual Machine (if any),.fdd image connected to the Virtual Machine (if any),The Wizard can delete a currently opened Virtual Machine that meets the following conditions:
To delete a Virtual Machine:

Click Next to proceed to the next wizard step.
Configuration file, virtual hard disk, output files of serial and parallel ports, and home directory are pre-selected for deleting while connected CD-ROM .iso images and floppy .fdd images do not, because they can be useful for other Virtual Machines. If you do not consider them to be useful, mark them for deletion on this screen. Note that virtual hard disks can also be attached to other Virtual Machines.

Review selected files, check those that should be deleted and click Finish when you are ready.

The Virtual Machine is considered to be successfully deleted if all the selected components or all selected components except home directory (if it was chosen for deleting) have been removed. If home directory contains any files it will not be deleted.
Click Exit to close the wizard.
After the Virtual Machine is deleted a blank VM is opened in the Parallels Workstation screen. The deleted machine disappears from the list of recently used configurations in the File menu.