Pinnacle West Capital Stock Beneish M Score

PNW Stock  USD 92.93  0.69  0.74%   
This module uses fundamental data of Pinnacle West to approximate the value of its Beneish M Score. Pinnacle West M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Pinnacle West Piotroski F Score and Pinnacle West Altman Z Score analysis.
  
At this time, Pinnacle West's Short and Long Term Debt Total is fairly stable compared to the past year. Net Debt is likely to climb to about 10.8 B in 2024, whereas Long Term Debt Total is likely to drop slightly above 5.3 B in 2024. At this time, Pinnacle West's ROE is fairly stable compared to the past year. Return On Tangible Assets is likely to climb to 0.03 in 2024, whereas Dividend Yield is likely to drop 0.03 in 2024.
At this time, it appears that Pinnacle West Capital is an unlikely manipulator. The earnings manipulation may begin if Pinnacle West's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Pinnacle West executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Pinnacle West's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.67
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables

1.04

Focus
Asset Quality

0.96

Focus
Expense Coverage

0.84

Focus
Gross Margin Strengs

1.63

Focus
Accruals Factor

0.84

Focus
Depreciation Resistance

1.39

Focus
Net Sales Growth

0.65

Focus
Financial Leverage Condition

1.64

Focus

Pinnacle West Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Pinnacle West's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Net Receivables448.5 M659.3 M
Way Down
Slightly volatile
Total Revenue3.1 B4.7 B
Way Down
Slightly volatile
Total Assets14 B24.7 B
Way Down
Slightly volatile
Total Current Assets1.1 B1.9 B
Way Down
Slightly volatile
Non Current Assets Total12.9 B22.7 B
Way Down
Slightly volatile
Property Plant Equipment2.9 B3.1 B
Notably Down
Pretty Stable
Depreciation And Amortization543.4 M854.1 M
Way Down
Slightly volatile
Total Current Liabilities1.4 B2.9 B
Way Down
Slightly volatile
Non Current Liabilities Total8.4 B15.5 B
Way Down
Slightly volatile
Net Debt10.8 B10.3 B
Sufficiently Up
Slightly volatile
Short Term Debt1.6 B1.6 B
Sufficiently Up
Slightly volatile
Long Term Debt4.3 B7.5 B
Way Down
Slightly volatile
Operating Income679.8 M824.6 M
Significantly Down
Slightly volatile
Total Cash From Operating Activities955.6 M1.2 B
Significantly Down
Pretty Stable
Short Term Investments36.7 M38.6 M
Notably Down
Slightly volatile
Long Term Investments1.1 B1.6 B
Way Down
Slightly volatile
Gross Profit Margin0.640.3928
Way Up
Slightly volatile

Pinnacle West Capital Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Pinnacle West's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Pinnacle West in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Pinnacle West's degree of accounting gimmicks and manipulations.

About Pinnacle West Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Income

679.77 Million

At this time, Pinnacle West's Operating Income is fairly stable compared to the past year.

Pinnacle West Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Pinnacle West. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201920202021202220232024 (projected)
Net Receivables408.1M432.8M508.1M608.3M659.3M448.5M
Total Revenue3.5B3.6B3.8B4.3B4.7B3.1B
Total Assets18.5B20.0B22.0B22.7B24.7B14.0B
Total Current Assets1.0B1.2B1.6B1.8B1.9B1.1B
Net Debt5.8B6.9B8.2B8.9B10.3B10.8B
Short Term Debt927.4M243.8M542.4M496.6M1.6B1.6B
Long Term Debt4.8B6.3B6.9B7.7B7.5B4.3B
Operating Income672.0M788.2M805.3M731.9M824.6M679.8M
Investments(3.1M)(1.3B)(1.4B)(1.6B)(1.6B)(1.6B)

Pinnacle West ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Pinnacle West's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Pinnacle West's managers, analysts, and investors.
Environmental
Governance
Social

About Pinnacle West Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Pinnacle West Capital's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Pinnacle West using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Pinnacle West Capital based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.

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Additional Tools for Pinnacle Stock Analysis

When running Pinnacle West's price analysis, check to measure Pinnacle West's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Pinnacle West is operating at the current time. Most of Pinnacle West's value examination focuses on studying past and present price action to predict the probability of Pinnacle West's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Pinnacle West's price. Additionally, you may evaluate how the addition of Pinnacle West to your portfolios can decrease your overall portfolio volatility.