American Electric Power Company Inc (AEP)

Fixed asset turnover

		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
Revenue (ttm)	US$ in thousands	18,982,300	19,286,200	19,470,600	19,737,800	19,639,500	18,819,800	17,916,700	17,103,500	16,792,000	16,341,200	15,784,600	15,452,100	14,918,500	14,923,900	15,172,500	15,252,100	15,561,400	15,746,500	15,764,600	16,204,200
Property, plant and equipment	US$ in thousands	76,693,400	75,821,100	74,681,400	73,347,000	73,339,100	69,813,100	68,708,200	67,878,000	66,001,300	66,691,200	65,664,500	64,696,100	63,901,600	62,786,400	61,926,800	61,048,900	60,138,100	58,692,700	57,202,900	55,968,600
Fixed asset turnover		0.25	0.25	0.26	0.27	0.27	0.27	0.26	0.25	0.25	0.25	0.24	0.24	0.23	0.24	0.25	0.25	0.26	0.27	0.28	0.29

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $18,982,300K ÷ $76,693,400K
= 0.25

American Electric Power Company Inc.'s fixed asset turnover has been relatively stable over the past eight quarters, ranging from 0.25 to 0.28. The fixed asset turnover ratio measures the efficiency at which the company generates revenue from its investment in fixed assets.

A declining trend in fixed asset turnover could indicate underutilization of fixed assets or inefficient operations. However, a consistent ratio within a narrow range, as seen in American Electric Power Company Inc.'s case, may indicate stable operations and effective asset utilization.

In this scenario, the fixed asset turnover ratio has shown a slight downward trend, moving from 0.28 in Q4 2022 to 0.25 in Q4 2023. This decrease suggests a potential decrease in revenue generated from fixed assets, which could be a point of concern for the company's management.

Further analysis of the company's operational efficiency, investment in fixed assets, and revenue generation strategies would be beneficial to understand the factors contributing to the changes in the fixed asset turnover ratio over time and to identify potential areas for improvement.