Pinnacle West Capital Corp (PNW)

Short-term

Turnover ratios

Inventory turnover for Pinnacle West Capital Corp. has remained relatively stable over the past five years, ranging from 2.97 to 3.63. This indicates the company's efficiency in managing its inventory levels and converting them into sales. The slight increase in 2023 suggests a slightly better performance in managing inventory compared to the previous year.

Receivables turnover has shown a declining trend from 8.50 in 2019 to 7.12 in 2023, indicating that the company is taking longer to collect payments from its customers. A lower ratio may suggest potential issues with credit policies or difficulties in collecting receivables promptly.

On the other hand, payables turnover has shown fluctuations over the years, ranging from 2.93 to 4.05. A higher payables turnover ratio implies that the company is paying its suppliers more quickly, which can sometimes indicate strong bargaining power or efficient cash management.

Unfortunately, the data provided does not include the working capital turnover ratio for Pinnacle West Capital Corp. This ratio would have shown how effectively the company is utilizing its working capital to generate sales. Without this information, a comprehensive analysis of the company's overall efficiency in using its working capital cannot be made based on the provided data.

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Average number of days

In analyzing Pinnacle West Capital Corp.'s activity ratios, we can see trends over the past five years.

1. Days of Inventory on Hand (DOH):
- The DOH has been relatively stable over the past five years, ranging from 100.49 days in 2023 to 122.83 days in 2020.
- A lower number of days indicates that the company is efficiently managing its inventory levels, whereas a higher number may suggest overstocking.
- Overall, Pinnacle West Capital Corp. has maintained a consistent level of inventory on hand over the years.

2. Days of Sales Outstanding (DSO):
- The DSO has shown a slight increase from 42.92 days in 2019 to 51.25 days in 2023.
- This ratio measures how quickly the company collects its accounts receivable. An increasing trend may indicate slower collection of payments from customers.
- Pinnacle West Capital Corp. should focus on improving its accounts receivable collection process to reduce the DSO and enhance cash flow efficiency.

3. Number of Days of Payables:
- The number of days of payables has fluctuated over the years, with a notable decrease from 124.49 days in 2021 to 90.09 days in 2023.
- A higher number of days of payables indicates that the company is taking longer to pay its suppliers, which may have cash flow implications.
- The recent decrease in days of payables suggests that Pinnacle West Capital Corp. has been managing its payables more efficiently.

In summary, Pinnacle West Capital Corp. has maintained a stable inventory level, experienced a slight increase in DSO, and recently improved its payables management. The company should continue to monitor these activity ratios to ensure efficient working capital management and cash flow optimization.

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Long-term

The fixed asset turnover ratio for Pinnacle West Capital Corp. has shown a gradual improvement over the past five years, increasing from 0.25 in 2019 to 0.27 in 2023. This indicates that the company's ability to generate sales from its fixed assets has been improving. A higher fixed asset turnover ratio suggests that the company is effectively utilizing its long-term assets to generate revenue.

On the other hand, the total asset turnover ratio has remained relatively stable over the same period, fluctuating between 0.17 and 0.19. This ratio measures the company's overall efficiency in generating sales from all its assets. The consistency in the total asset turnover ratio suggests that the company may be effectively managing its total asset base to generate revenue.

Overall, the trends in both fixed asset turnover and total asset turnover ratios indicate that Pinnacle West Capital Corp. has been able to maintain or improve its efficiency in utilizing its assets to generate revenue over the past five years. This suggests a positive outlook for the company's long-term operational efficiency and asset utilization.