American Electric Power Company Inc (AEP)

Days of inventory on hand (DOH)

		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
Inventory turnover		0.40	0.52	0.55	0.69	0.79	0.84	0.83	0.88	0.84	0.85	0.68	0.61	0.58	0.64	0.63	0.67	0.66	0.96	0.93	2.45
DOH	days	901.71	701.77	668.40	529.55	462.59	435.69	437.94	414.23	433.34	428.04	534.72	599.41	625.85	569.73	576.06	548.72	555.53	380.34	391.57	149.01

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.40
= 901.71

American Electric Power Company Inc.'s Days of Inventory on Hand (DOH) has exhibited an increasing trend over the past eight quarters, indicating a potential inefficiency in managing inventory levels. This ratio measures the average number of days it takes for the company to sell its inventory, with a higher DOH suggesting slower inventory turnover.

In Q4 2023, the company had 104.28 days of inventory on hand, the highest level in the provided data series. This may imply that the company is holding excessive inventory, which could tie up working capital and lead to increased carrying costs.

The upward trend from 66.96 days in Q4 2022 to 104.28 days in Q4 2023 suggests a deterioration in inventory management efficiency over this period. Potential reasons for this increase could include overproduction, sluggish sales, or challenges in forecasting demand accurately.

Analysts and stakeholders should monitor this trend closely to assess the impact of high inventory levels on the company's liquidity, profitability, and overall operations. Management may need to implement strategies to optimize inventory levels and improve inventory turnover to enhance the company's financial performance and competitiveness in the industry.