Pinnacle West Capital Corp (PNW)

Short-term

Turnover ratios

Based on the provided data, we can analyze the activity ratios of Pinnacle West Capital Corp as follows:

1. Inventory Turnover: This ratio indicates how effectively the company manages its inventory. The trend shows a slight fluctuation in inventory turnover ranging from 5.42 to 6.55, with a slight increase in recent quarters. This suggests that the company is efficiently selling its inventory.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently the company collects its outstanding receivables. The company's receivables turnover has varied between 6.12 and 14.92, with fluctuating trends. However, the ratio seems to have stabilized around 10.23 in the most recent quarters.

3. Payables Turnover: This ratio reflects how quickly the company pays its suppliers. Pinnacle West Capital Corp's payables turnover ranges from 5.17 to 8.19, showing some fluctuation in payment terms. The company seems to have managed its payables effectively, with the ratio remaining relatively stable around 6.00 in recent quarters.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently the company is using its working capital to generate revenue. The data shows significant variations in this ratio, with values ranging from 16.75 to 186.44. In certain quarters, the ratio is not calculable, indicating potential inefficiencies in working capital management.

Overall, Pinnacle West Capital Corp's activity ratios show a mix of stable and fluctuating trends, reflecting various aspects of the company's operational efficiency and working capital management. Further analysis and comparison with industry benchmarks could provide additional insights into the company's performance in these areas.

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Average number of days

Pinnacle West Capital Corp's activity ratios provide insights into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- The company held an average of around 61 days of inventory during the reporting period. The trend in DOH shows some fluctuations, with a slight increase towards the end of the period, reaching a peak of 67.52 days in June 2021, before decreasing to around 60 days by the end of the period.
- This indicates that Pinnacle West Capital Corp manages its inventory reasonably well, with a steady level of inventory turnover over the period.

2. Days of Sales Outstanding (DSO):
- The average collection period for accounts receivable was around 36 days, with some variability in DSO metrics. There was an increase in DSO in September 2022, reaching 51.39 days, but it decreased to around 35 days by the end of the period.
- The DSO trend suggests that the company's credit and collection policies have been relatively stable during the period, with a focus on timely receivables management.

3. Number of Days of Payables:
- Pinnacle West Capital Corp took an average of approximately 58 days to pay its suppliers during the period. The trend in payables days shows some fluctuation, with increases in payables days in June 2021 and September 2022, but then decreased towards the end of the period.
- The company's management of payables indicates a balance between maximizing supplier credit terms and maintaining good relationships with suppliers.

In conclusion, based on the activity ratios analysis, Pinnacle West Capital Corp appears to effectively manage its inventory, accounts receivable, and accounts payable, maintaining stable turnover levels and collection periods while balancing payment terms with suppliers.

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Long-term

Pinnacle West Capital Corp's long-term activity ratios show the efficiency of the company in managing its assets. The Fixed Asset Turnover ratio remained relatively stable around 0.26 in 2020 and 2021, indicating that the company was generating $0.26 in revenue for every dollar invested in fixed assets. However, there was a slight improvement in this ratio from 2022 to 2024, reaching 0.30 by the end of 2024. This suggests that the company was able to more efficiently utilize its fixed assets to generate revenue over time.

In comparison, the Total Asset Turnover ratio reflects the company's ability to generate sales from all its assets. The ratio was consistent at around 0.18 in 2020 and 2021, indicating that for every dollar of total assets, Pinnacle West Capital Corp generated $0.18 in revenue. There was a slight increase in this ratio from 2022 to 2024, reaching 0.20 by the end of 2024. This indicates that the company became more efficient in generating sales relative to its total assets over the years.

Overall, the improvement in both Fixed Asset Turnover and Total Asset Turnover ratios over the years suggests that Pinnacle West Capital Corp enhanced its asset utilization and revenue generation efficiency, which could be a positive sign for the company's long-term growth and profitability.