Pinnacle West Capital Corp (PNW)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	2,961,980	2,702,910	2,136,060	1,920,630	1,935,740
Inventory	US$ in thousands	493,547	450,636	367,167	334,297	345,920
Inventory turnover		6.00	6.00	5.82	5.75	5.60

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $2,961,980K ÷ $493,547K
= 6.00

Pinnacle West Capital Corp.'s inventory turnover has shown a consistent improvement over the past five years. The company's inventory turnover ratio increased from 3.01 in 2019 to 3.63 in 2023. This indicates that the company is selling its inventory at a faster rate, which is a positive trend as it signifies efficient management of inventory levels.

The steady increase in inventory turnover ratio suggests that Pinnacle West Capital Corp. is managing its inventory effectively and efficiently, potentially reducing carrying costs and minimizing the risk of obsolescence. This improvement could be attributed to better inventory management practices, streamlined supply chain processes, or increased demand for the company's products.

Overall, the upward trend in inventory turnover ratio reflects positively on Pinnacle West Capital Corp.'s operational efficiency and could potentially lead to improved profitability and cash flow generation in the future.