Pinnacle West Capital Corp (PNW)

Interest coverage

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	824,640	787,011	688,321	728,136	731,911	745,177	756,977	812,268	805,310	786,141	811,776	795,264	788,152	769,301	717,583	652,298	671,960	726,847	756,864	802,437
Interest expense (ttm)	US$ in thousands	331,323	313,638	289,314	270,029	255,539	246,576	241,877	237,225	233,262	232,354	230,394	230,757	228,971	225,702	222,863	217,893	216,723	216,931	218,628	220,074
Interest coverage		2.49	2.51	2.38	2.70	2.86	3.02	3.13	3.42	3.45	3.38	3.52	3.45	3.44	3.41	3.22	2.99	3.10	3.35	3.46	3.65

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $824,640K ÷ $331,323K
= 2.49

Based on the provided data for Pinnacle West Capital Corp.'s interest coverage ratio over the past eight quarters, we observe fluctuations in the company's ability to meet its interest obligations from its operating profits. The interest coverage ratio measures the company's ability to pay interest expenses on its debt.

The trend shows a slight decline in the interest coverage ratio from Q1 2022 to Q2 2023, which may indicate a decrease in the company's ability to cover its interest expenses. However, it is important to note that despite these fluctuations, the company has maintained a healthy interest coverage ratio above 2 for all quarters, indicating that it has generated enough operating income to cover its interest payments.

Overall, the interest coverage ratio for Pinnacle West Capital Corp. appears to be relatively stable and sufficient to meet its interest obligations, although management should continue monitoring and managing the company's financial leverage and interest expense to ensure long-term financial health.