Pinnacle West Capital Corp (PNW)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	1,689,400	1,926,970	1,750,550	1,551,100	1,198,320
Total current liabilities	US$ in thousands	2,843,800	2,889,350	1,762,140	1,756,870	1,360,430
Current ratio		0.59	0.67	0.99	0.88	0.88

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $1,689,400K ÷ $2,843,800K
= 0.59

The current ratio of Pinnacle West Capital Corp has fluctuated over the past five years. As of December 31, 2020, and December 31, 2021, the current ratio remained stable at 0.88. There was a slight improvement in the ratio to 0.99 as of December 31, 2022, indicating a stronger ability to meet short-term obligations. However, this trend reversed in the following years, with a significant drop to 0.67 as of December 31, 2023, and further decline to 0.59 as of December 31, 2024.

A current ratio below 1 suggests that the company may have difficulty covering its short-term liabilities with its current assets. The decreasing trend in the current ratio over the last two years may raise concerns about Pinnacle West's liquidity and ability to pay off its short-term debts. Further analysis of the company's asset management and cash flow is recommended to better understand the underlying reasons for the declining current ratio and its potential impact on the company's financial health.