Pinnacle West Capital Corp (PNW)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 3,838 4,955 4,832 9,969 59,968
Short-term investments US$ in thousands — 38,585 5,709,820 63,481 2,931
Receivables US$ in thousands 500,759 491,791 443,517 374,083 300,586
Total current liabilities US$ in thousands 2,843,800 2,889,350 1,762,140 1,756,870 1,360,430
Quick ratio 0.18 0.19 3.49 0.25 0.27

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($3,838K + $—K + $500,759K) ÷ $2,843,800K
= 0.18

The quick ratio of Pinnacle West Capital Corp, a utility holding company, has exhibited significant fluctuations over the past five years. In December 31, 2020, the quick ratio was at 0.27, implying that the company had 27 cents of liquid assets available to cover each dollar of current liabilities. The ratio slightly decreased to 0.25 by December 31, 2021.

However, there was a remarkable spike in the quick ratio to 3.49 by December 31, 2022, indicating a significant improvement in the company's short-term liquidity position. This could be attributed to a substantial increase in the availability of highly liquid assets relative to current liabilities.

Subsequently, the quick ratio dropped to 0.19 by December 31, 2023, suggesting a potential liquidity strain compared to the previous year. The trend continued to decrease to 0.18 by December 31, 2024, underlining a further deterioration in the company's ability to meet its short-term obligations with readily available assets.

Overall, the fluctuating quick ratio of Pinnacle West Capital Corp raises concerns about the company's short-term liquidity management. It is important for stakeholders and investors to closely monitor the company's liquidity position and assess the factors contributing to the fluctuation in the quick ratio over time.