American Electric Power Co Inc (AEP)

Days of Inventory on Hand (DOH) is a key financial ratio that measures how efficiently a company manages its inventory. American Electric Power Co Inc's DOH has seen fluctuations over the past five years, ranging from 103.18 days to 478.23 days.

In December 2020, the company had a DOH of 368.52 days, indicating that it was holding on to inventory for an extended period before selling it. This could suggest inefficiencies in inventory management, leading to higher carrying costs and potentially risking obsolescence.

By December 2021, the DOH improved to 257.77 days, reflecting a more efficient management of inventory. The company was able to reduce the number of days it held inventory, which could result in lower carrying costs and improved cash flow.

However, in December 2022, the DOH increased to 305.28 days, signaling a slight deterioration in inventory management efficiency compared to the previous year. This increase could potentially lead to higher carrying costs and tie up capital in excess inventory.

The trend continued in December 2023 with a sharp increase in DOH to 478.23 days, reaching a concerning level. Holding inventory for over a year indicates significant inefficiencies that need to be addressed promptly to avoid risks associated with excess inventory.

Finally, by December 2024, the DOH improved significantly to 103.18 days, reflecting a substantial enhancement in inventory management efficiency. Holding inventory for fewer days can help free up working capital, reduce carrying costs, and minimize the risk of obsolescence.

In conclusion, American Electric Power Co Inc has experienced fluctuations in its DOH over the past five years, indicating varying levels of efficiency in managing inventory. It is essential for the company to monitor and optimize its inventory levels to improve operational performance and financial health.

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Dec 31, 2024