Pinnacle West Capital Corp (PNW)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 57.89 | 60.82 | 60.85 | 62.74 | 63.53 |
| Days of sales outstanding (DSO) | days | 35.66 | 38.22 | 37.44 | 35.90 | 30.59 |
| Number of days of payables | days | 56.04 | 54.52 | 58.12 | 67.17 | 60.54 |
| Cash conversion cycle | days | 37.51 | 44.52 | 40.16 | 31.47 | 33.57 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.89 + 35.66 – 56.04
= 37.51
The cash conversion cycle of Pinnacle West Capital Corp has shown mixed trends over the past five years. In 2020, the company's cash conversion cycle was 33.57 days, which decreased slightly to 31.47 days in 2021, indicating a more efficient cash conversion process. However, in 2022, there was a significant increase to 40.16 days, suggesting a delay in cash inflows relative to cash outflows. This trend continued in 2023 with a further increase to 44.52 days, indicating potential liquidity challenges or inefficiencies in the company's working capital management.
Despite the increase in 2023, there was a turnaround in 2024, with the cash conversion cycle decreasing to 37.51 days. While still higher than the levels observed in 2020 and 2021, this improvement may indicate efforts to optimize working capital processes or better manage cash flows.
Overall, the fluctuation in Pinnacle West Capital Corp's cash conversion cycle suggests the need for continuous monitoring and strategic adjustments to ensure effective cash management and operational efficiency moving forward.
Peer comparison
Dec 31, 2024