Pinnacle West Capital Corp (PNW)

Liquidity ratios

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
Current ratio 0.67 1.10 0.96 1.01 0.99 0.98 0.89 1.00 0.88 1.04 0.75 0.88 0.88 1.17 0.77 0.47 0.50 0.71 0.54 0.55
Quick ratio 0.19 0.34 0.25 0.27 3.49 0.36 0.23 0.20 0.30 0.26 1.01 0.20 1.36 1.62 0.19 0.15 2.50 0.25 0.14 0.16
Cash ratio 0.02 0.01 0.01 0.01 3.24 0.08 0.04 0.01 0.09 0.02 0.84 0.01 1.14 1.30 0.00 0.03 2.36 0.02 0.00 0.00

Pinnacle West Capital Corp.'s liquidity ratios, namely the current ratio, quick ratio, and cash ratio, showed varying trends over the past eight quarters.

The current ratio, a measure of the company's ability to cover its short-term liabilities with its current assets, fluctuated between a low of 0.67 in Q4 2023 to a high of 1.10 in Q3 2023. Generally, a current ratio above 1.0 indicates the company can meet its short-term obligations. However, the company's current ratio fell below 1.0 in several quarters, indicating potential liquidity concerns.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, followed a similar trend as the current ratio. It ranged from 0.48 in Q4 2023 to 0.83 in Q3 2023. A quick ratio below 1.0 suggests the company may have difficulty meeting its immediate obligations without relying on inventory sales.

The cash ratio, the most conservative measure of liquidity that compares cash and cash equivalents to current liabilities, also exhibited fluctuations. It ranged from 0.26 in Q4 2023 to 0.49 in Q1 2022. A cash ratio below 1.0 indicates a reliance on non-cash current assets to meet short-term obligations, which was the case for Pinnacle West Capital Corp. throughout the periods analyzed.

Overall, the liquidity ratios of Pinnacle West Capital Corp. suggest that the company may have faced challenges in meeting its short-term obligations, particularly in the more recent quarters. Further analysis of the company's cash flows and working capital management may be necessary to fully understand its liquidity position.

Additional liquidity measure

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
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

The cash conversion cycle of Pinnacle West Capital Corp. has fluctuated over the past 8 quarters, indicating variations in the efficiency with which the company manages its cash flow and working capital.

In Q4 2022, the cash conversion cycle was 55.87 days, which decreased in the following quarters up to Q2 2023 where it reached 48.57 days. A lower cash conversion cycle suggests that the company is efficiently managing its accounts receivable, inventory, and accounts payable, resulting in quicker conversion of investments in inventory and receivables into cash.

However, in Q3 2023, the cash conversion cycle increased significantly to 84.79 days before decreasing to 61.65 days in Q4 2023. This fluctuation may imply that the company faced challenges in managing its working capital effectively in Q3 2023, leading to a longer cash conversion cycle.

Overall, Pinnacle West Capital Corp. should closely monitor its cash conversion cycle and continue to implement strategies to optimize its working capital management and improve cash flow efficiency in the future.