Pinnacle West Capital Corporation (PNW) Return on Invested Capital (ROIC) - Discounting Cash Flows
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Pinnacle West Capital Corporation
PNW (NYSE)
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  • Pinnacle West Capital Corporation Return on Invested Capital (ROIC)

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Solve for Assumption Example

Return on Invested Capital (ROIC)

The return on capital or invested capital in a business attempts to measure the return earned on capital invested in an investment.

Read more: Aswath Damodaran - Return Measures PDF

Interactive Assumptions

Historical Years

Historical Years

Historical Years

The number of years of historical data used to calculate averages and trends for analysis.

Historical ROIC Values

Monetary values in USD

ROIC Formula

Return on Invested Capital (ROIC) = Net Operating Profit After Tax (NOPAT) / Invested Capital

The Net Operating Profit After Tax (NOPAT) is calculated using the reported Earnings Before Interest and Taxes (EBIT) or Operating Income on the income statement adjusted for the tax liability.

Net Operating Profit After Tax (NOPAT) = Operating Income * (1 - Income Tax Rate)

There are two ways to calculate invested capital: One looks at the company's assets, and another looks at its financing from debt and equity. In this model, we are using the financing based approach.

Invested Capital = Total Stockholders Equity + Total Debt - Cash and Short Term Investments

Historical data

Monetary values in USD

amounts except #

LTM
Mar 10 		2025
Dec 31 		2024
Dec 31 		2023
Dec 31 		2022
Dec 31 		2021
Dec 31 		2020
Dec 31 		2019
Dec 31 		2018
Dec 31 		2017
Dec 31 		2016
Dec 31
Operating Income 1,159 1,118 1,012 824.6 731.9 805.3 788.2 672 773.7 909.8 835.6
Income Tax Rate 14.45% 14.45% 15.01% 12.91% 13% 14.76% 12.06% -2.91% 20.15% 33.71% 33.87%
Net Operating Profit After Tax (NOPAT) 991.4 956.6 860.2 718.2 636.8 686.5 693.1 691.5 617.8 603.1 552.6
Total Stockholders Equity 7,046 7,046 6,754 6,178 6,049 5,906 5,634 5,431 5,223 5,007 4,804
Total Debt 17,848 17,848 11,048 10,303 8,877 8,185 6,919 5,812 5,215 4,967 4,324
Cash and Short Term Investments 9.85 9.85 3.84 4.96 4.83 9.97 59.97 10.28 5.77 13.89 8.88
Invested Capital 24,885 24,885 17,799 16,476 14,921 14,081 12,493 11,232 10,432 9,960 9,119
Return on Invested Capital (ROIC) 3.98% 3.84% 4.83% 4.36% 4.27% 4.88% 5.55% 6.16% 5.92% 6.05% 6.06%

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Learn more: Prof. Aswath Damodaran's Guide to Discounted Cash Flow Valuation

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Learn more: Prof. Aswath Damodaran's Guide to Dividend Discount Models

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Learn more: Prof. Aswath Damodaran's Guide to Discounted Cash Flow Valuation

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Read more on Aswath Damodaran - Return Measures PDF

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