Pinnacle West Capital Corp (PNW)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	824,640	731,911	805,310	788,152	671,960
Total assets	US$ in thousands	24,661,200	22,723,400	22,003,200	20,020,400	18,479,200
Operating ROA		3.34%	3.22%	3.66%	3.94%	3.64%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $824,640K ÷ $24,661,200K
= 3.34%

The operating return on assets (operating ROA) of Pinnacle West Capital Corp. has shown a fluctuating trend over the past five years. In 2023, the operating ROA was 3.34%, slightly higher than the previous year's 3.22%. However, it was lower compared to 2021 when it was 3.66% and notably below the 3.94% achieved in 2020.

The declining trend in operating ROA from 2020 to 2023 may suggest inefficiencies in the company's operations, resulting in lower profitability per dollar of assets employed. Management should investigate the reasons behind this trend and take appropriate actions to improve operational efficiency and enhance the company's profitability.