Pinnacle West Capital Corp (PNW)

Payables 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
Payables	US$ in thousands	485,426	442,455	430,425	393,083	318,585
Payables turnover		6.51	6.69	6.28	5.43	6.03

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $3,161,450K ÷ $485,426K
= 6.51

Based on the data provided, the payables turnover ratio for Pinnacle West Capital Corp has shown a fluctuating trend over the past five years. The ratio was 6.03 in December 31, 2020, declined to 5.43 in December 31, 2021, then increased to 6.28 in December 31, 2022, further rose to 6.69 in December 31, 2023, and slightly decreased to 6.51 in December 31, 2024.

A higher payables turnover ratio indicates that the company is paying its suppliers more frequently within a year. This may suggest efficient management of payables and strong supplier relationships. However, a very high payables turnover ratio could also indicate aggressive tactics or possible liquidity challenges if the company is paying suppliers too quickly.

Conversely, a lower payables turnover ratio may signify that the company is taking longer to pay its suppliers, which could strain relationships or indicate potential cash flow issues.

Overall, continuous monitoring of the payables turnover ratio can provide insights into the company's payment practices, efficiency in managing working capital, and potential financial risks related to supplier relationships and liquidity management.