Pinnacle West Capital Corp (PNW)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 38.31% | 36.93% | 37.50% | 43.84% | 46.46% |
| Operating profit margin | 19.75% | 17.56% | 16.93% | 21.17% | 21.97% |
| Pretax margin | 14.04% | 12.32% | 12.91% | 19.16% | 17.53% |
| Net profit margin | 11.88% | 10.68% | 11.18% | 16.27% | 15.35% |
Pinnacle West Capital Corp's profitability ratios have shown a mixed trend over the years. The gross profit margin decreased from 46.46% in December 31, 2020 to 38.31% in December 31, 2024, indicating a decline in the company's ability to generate profit after accounting for the cost of goods sold.
Similarly, the operating profit margin decreased from 21.97% in December 31, 2020 to 19.75% in December 31, 2024, which suggests a decline in the company's efficiency in managing its operating expenses relative to its net sales.
The pretax margin also exhibited a downward trend, falling from 17.53% in December 31, 2020 to 14.04% in December 31, 2024, indicating a decrease in the company's profitability before accounting for taxes.
Moreover, the net profit margin decreased from 15.35% in December 31, 2020 to 11.88% in December 31, 2024, signaling a decline in the company's profitability after accounting for all expenses.
Overall, the decreasing trend in profitability ratios for Pinnacle West Capital Corp raises concerns about the company's ability to maintain and grow its profits over the years. Management may need to focus on cost control measures and operational efficiency to improve the company's profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.88% | 3.34% | 3.22% | 3.66% | 3.94% |
| Return on assets (ROA) | 2.33% | 2.03% | 2.13% | 2.81% | 2.75% |
| Return on total capital | 6.83% | 6.01% | 5.31% | 6.28% | 6.60% |
| Return on equity (ROE) | 9.01% | 8.12% | 8.00% | 10.48% | 9.77% |
Pinnacle West Capital Corp's profitability ratios reflect stable performance over the years. The Operating Return on Assets (Operating ROA) decreased slightly from 3.94% in 2020 to 3.22% in 2022, before showing a minor improvement to 3.88% in 2024. This metric measures the efficiency of the company in generating operating profits relative to its total assets.
Similarly, the Return on Assets (ROA) declined from 2.75% in 2020 to 2.03% in 2023, before slightly recovering to 2.33% in 2024. ROA indicates the company's overall ability to generate profits from its assets.
The Return on Total Capital saw fluctuations, with a peak of 6.83% in 2024, following a dip in 2022. This metric assesses the company's profitability concerning all of its capital sources.
Lastly, the Return on Equity (ROE) also exhibited a mixed trend, increasing from 9.77% in 2020 to 10.48% in 2021 before declining to 8.00% in 2022. It then rose to 9.01% by the end of 2024. ROE measures the return generated on shareholders' equity investments.
Overall, Pinnacle West Capital Corp's profitability ratios indicate a stable performance, with fluctuations in certain metrics over the years. The company should continue monitoring and managing these ratios to ensure sustainable profitability and shareholder value.