Pinnacle West Capital Corp (PNW)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 24,661,200 | 22,723,400 | 22,003,200 | 20,020,400 | 18,479,200 |
| Total stockholders’ equity | US$ in thousands | 6,177,660 | 6,048,650 | 5,906,200 | 5,633,500 | 5,430,650 |
| Financial leverage ratio | 3.99 | 3.76 | 3.73 | 3.55 | 3.40 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $24,661,200K ÷ $6,177,660K
= 3.99
The financial leverage ratio of Pinnacle West Capital Corp. has displayed a generally increasing trend over the past five years. The ratio has risen from 3.40 in 2019 to 3.99 in 2023. This indicates that the company's reliance on debt to finance its operations and growth has been gradually increasing. A financial leverage ratio above 3 suggests that the company has substantial debt in its capital structure relative to its equity.
The upward trend in the financial leverage ratio could imply that Pinnacle West Capital Corp. has been utilizing more debt to fund its investments and operations, potentially indicating a riskier financial position. Investors and creditors may view higher levels of leverage as a concern due to the increased financial risk and interest payment obligations. It is important for the company to carefully manage its debt levels to ensure it remains sustainable and does not jeopardize its financial stability in the long term.
Peer comparison
Dec 31, 2023