Pinnacle West Capital Corp (PNW)

Financial leverage ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	24,661,200	24,434,400	23,979,300	23,580,400	22,723,400	22,844,600	22,501,500	22,201,000	22,003,200	21,536,400	21,061,600	20,184,700	20,020,400	19,751,400	19,307,400	18,561,800	18,479,200	18,377,600	18,165,700	17,854,100
Total stockholders’ equity	US$ in thousands	6,177,660	6,374,680	5,966,920	6,048,920	6,048,650	6,244,560	5,908,280	5,930,570	5,906,200	6,064,880	5,717,620	5,682,520	5,633,500	5,841,390	5,489,560	5,469,420	5,430,650	5,552,670	5,233,080	5,251,060
Financial leverage ratio		3.99	3.83	4.02	3.90	3.76	3.66	3.81	3.74	3.73	3.55	3.68	3.55	3.55	3.38	3.52	3.39	3.40	3.31	3.47	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 been relatively stable over the past eight quarters, fluctuating between 3.66 and 4.02. The ratio measures the extent to which the company relies on debt to finance its operations and investments, indicating the proportion of the company's assets that are funded by debt.

A higher leverage ratio suggests a greater reliance on debt financing, which can increase financial risk due to higher interest payments and the potential impact of economic downturns on debt repayment. In contrast, a lower ratio may indicate a more conservative capital structure with lower financial risk but potentially lower returns on equity.

Based on the data provided, Pinnacle West Capital Corp. has maintained a moderate level of financial leverage, balancing the benefits of debt financing with the associated risks. It is important for investors to monitor changes in the financial leverage ratio over time to assess the company's ability to meet its debt obligations and manage financial risks effectively.