American Electric Power Co Inc (AEP)

Fixed asset turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	19,721,300	18,982,300	19,639,500	16,792,000	14,918,500
Property, plant and equipment	US$ in thousands	714,900	564,300	73,339,100	66,001,300	63,901,600
Fixed asset turnover		27.59	33.64	0.27	0.25	0.23

December 31, 2024 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $19,721,300K ÷ $714,900K
= 27.59

The fixed asset turnover ratio measures how efficiently a company generates revenue from its investments in fixed assets. American Electric Power Co Inc's fixed asset turnover has shown a steady increase over the analyzed period.

In December 2020, the fixed asset turnover was 0.23, indicating that for every dollar invested in fixed assets, the company generated $0.23 in revenue. This ratio improved to 0.25 in December 2021 and further increased to 0.27 in December 2022, suggesting the company was utilizing its fixed assets more efficiently to generate revenue.

However, there was a significant spike in the fixed asset turnover ratio in December 2023, soaring to 33.64. This could be due to various factors such as a change in accounting methods, a significant increase in revenue, or a substantial decrease in the value of fixed assets. It would be essential to investigate further to understand the reasons behind this anomalous spike.

Subsequently, the fixed asset turnover ratio dropped to 27.59 in December 2024. While still significantly higher than the initial values, this decrease may indicate a possible slowdown in revenue generation relative to the value of fixed assets or a revaluation of assets.

Overall, the trend in American Electric Power Co Inc's fixed asset turnover ratio suggests increasing efficiency in utilizing fixed assets to generate revenue, with notable fluctuations in some periods that warrant further investigation for a comprehensive understanding of the company's asset management performance.