Pinnacle West Capital Corp (PNW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.30 | 6.00 | 6.00 | 5.82 | 5.75 |
| Receivables turnover | 10.23 | 9.55 | 9.75 | 10.17 | 11.93 |
| Payables turnover | 6.51 | 6.69 | 6.28 | 5.43 | 6.03 |
| Working capital turnover | — | — | — | — | — |
Pinnacle West Capital Corp's activity ratios provide insight into how efficiently the company manages its resources related to inventory, receivables, and payables.
- Inventory Turnover: Pinnacle West's inventory turnover has shown a positive trend, increasing from 5.75 in 2020 to 6.30 in 2024. This indicates that the company is selling its inventory more frequently each year, which could suggest effective inventory management and potentially lower holding costs.
- Receivables Turnover: The receivables turnover ratio has fluctuated over the years, decreasing from 11.93 in 2020 to a low of 9.55 in 2023, before slightly increasing to 10.23 in 2024. This volatility could indicate changes in the company's credit policies or the ability of customers to pay outstanding invoices.
- Payables Turnover: Pinnacle West's payables turnover ratio has shown some variability, with a decrease from 6.03 in 2020 to 5.43 in 2021, followed by an increase to 6.51 in 2024. This may reflect changes in the company's payment schedules to suppliers or changes in the industry dynamics.
- Working Capital Turnover: The data provided does not include information on the working capital turnover ratio for Pinnacle West. This ratio could provide insights into how effectively the company is using its working capital to generate sales.
In conclusion, Pinnacle West Capital Corp's activity ratios suggest that the company is efficiently managing its inventory and payables, although there may be room for improvement in managing receivables effectively. Further analysis would be required to understand the overall impact of these ratios on the company's financial performance and operational efficiency.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 57.89 | 60.82 | 60.85 | 62.74 | 63.53 |
| Days of sales outstanding (DSO) | days | 35.66 | 38.22 | 37.44 | 35.90 | 30.59 |
| Number of days of payables | days | 56.04 | 54.52 | 58.12 | 67.17 | 60.54 |
Based on the provided data for Pinnacle West Capital Corp, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The Days of Inventory on Hand have been gradually decreasing over the years from 63.53 days in 2020 to 57.89 days in 2024. This indicates that the company is managing its inventory more efficiently, turning over its inventory faster.
2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding have shown slight fluctuations over the years, with an increase from 30.59 days in 2020 to 38.22 days in 2023 and a subsequent decrease to 35.66 days in 2024. A decreasing trend is generally preferred as it suggests that the company is collecting receivables more quickly.
3. Number of Days of Payables:
- The Number of Days of Payables initially increased in 2021 to 67.17 days but then decreased to 56.04 days in 2024. A decreasing trend in the number of days of payables implies that the company is taking longer to pay its suppliers, potentially indicating improved liquidity management.
In summary, Pinnacle West Capital Corp has been effectively managing its inventory, improving its collection of receivables, and optimizing its payment processes to suppliers over the years. These trends indicate enhanced operational efficiency and financial management within the company.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.30 | 0.30 | 0.30 | 0.27 | 0.26 |
| Total asset turnover | 0.20 | 0.19 | 0.19 | 0.17 | 0.18 |
The fixed asset turnover ratio for Pinnacle West Capital Corp has shown a gradual improvement over the past five years, increasing from 0.26 in 2020 to 0.30 in 2024. This indicates that the company is generating more revenue relative to its investment in fixed assets over time.
In comparison, the total asset turnover ratio has fluctuated but generally trended upwards, from 0.18 in 2020 to 0.20 in 2024. This suggests that Pinnacle West Capital Corp is becoming more efficient in utilizing its total assets to generate sales.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Pinnacle West Capital Corp has been able to improve its operational efficiency and asset utilization over the past five years. This could be a positive sign for the company's long-term financial performance and growth potential.