Pinnacle West Capital Corp (PNW)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	3,161,450	2,961,980	2,702,910	2,136,060	1,920,630
Inventory	US$ in thousands	501,442	493,547	450,636	367,167	334,297
Inventory turnover		6.30	6.00	6.00	5.82	5.75

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $3,161,450K ÷ $501,442K
= 6.30

Based on the provided data for Pinnacle West Capital Corp's inventory turnover, there has been a consistent improvement in the company's efficiency in managing its inventory over the years. The inventory turnover ratio has increased steadily from 5.75 in December 2020 to 6.30 in December 2024. This indicates that the company is selling and replacing its inventory more frequently, which is a positive sign as it shows better inventory management.

A higher inventory turnover ratio generally implies that the company is effectively managing its inventory levels, reducing the risk of obsolete inventory, and improving cash flow by converting inventory into sales more rapidly. The increasing trend in inventory turnover over the years suggests that Pinnacle West Capital Corp has been able to optimize its inventory control and sales strategies.

Overall, the consistent improvement in the inventory turnover ratio reflects positively on the company's operational efficiency and its ability to effectively manage its inventory levels, contributing to better overall financial performance.