Pinnacle West Capital Corp (PNW)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	61.50	60.59	61.93	59.84	60.85	65.29	63.53	62.84	63.59	67.35	67.52	63.90	63.53	52.40	55.69	60.64	65.23	84.10	82.31	79.40
Days of sales outstanding (DSO)	days	38.22	49.89	36.85	35.69	37.44	51.39	36.68	28.80	35.90	39.45	33.05	24.46	30.59	41.90	30.13	29.17	29.44	37.84	26.19	24.12
Number of days of payables	days	55.13	49.69	54.90	46.50	58.12	70.58	69.04	56.90	68.08	62.50	69.62	58.26	60.54	44.55	52.47	53.67	65.33	74.33	85.59	68.16
Cash conversion cycle	days	44.59	60.79	43.89	49.03	40.16	46.11	31.17	34.73	31.41	44.30	30.95	30.11	33.57	49.75	33.35	36.14	29.34	47.61	22.90	35.37

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.50 + 38.22 – 55.13
= 44.59

The cash conversion cycle of Pinnacle West Capital Corp. has shown fluctuations over the past eight quarters. The company's cash conversion cycle is a measure of how long it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

In Q4 2022, the cash conversion cycle was at its lowest at 48.57 days, indicating an efficient management of inventory and receivables. However, in Q3 2023, the cycle increased significantly to 84.79 days, suggesting a potential delay in converting investments into cash inflows.

Overall, the company's cash conversion cycle has fluctuated between 48.57 days and 84.79 days over the past eight quarters, with an average cycle of approximately 63 days. This indicates that Pinnacle West Capital Corp. may have varying efficiency levels in managing its working capital and liquidity. Keeping a close eye on these fluctuations and implementing strategies to improve the cash conversion cycle can help the company optimize its working capital management and cash flow efficiency.