Pinnacle West Capital Corp (PNW)

Net profit margin

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	501,557	483,602	618,720	550,559	538,320
Revenue	US$ in thousands	4,695,990	4,324,380	3,803,840	3,586,980	3,471,210
Net profit margin		10.68%	11.18%	16.27%	15.35%	15.51%

December 31, 2023 calculation

Net profit margin = Net income ÷ Revenue
= $501,557K ÷ $4,695,990K
= 10.68%

Pinnacle West Capital Corp.'s net profit margin has shown some fluctuations over the past five years. In 2023, the net profit margin decreased to 10.68% from 11.18% in 2022. This decline indicates that the company's profitability relative to its revenue decreased slightly in the most recent year. However, it is important to note that the net profit margin in 2023 is still within a reasonable range.

Comparing 2023 to 2021, there was a significant decrease in the net profit margin from 16.27% to 10.68%. This suggests that the company's profitability decreased noticeably during this period. It is worth investigating the reasons behind this decline in profitability to identify any potential areas of concern.

In 2020 and 2019, Pinnacle West Capital Corp. had relatively stable net profit margins of 15.35% and 15.51%, respectively. These consistent levels of profitability indicate that the company was able to maintain good control over its costs and generate healthy profits relative to its revenue during those years.

Overall, while the recent decrease in net profit margin in 2023 may raise some concerns, Pinnacle West Capital Corp. has generally maintained a reasonable level of profitability over the past five years. Analysing the factors that contributed to the fluctuations in net profit margin can provide further insights into the company's financial performance and strategies for improvement.