American Electric Power Company Inc (AEP)

Inventory 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
Cost of revenue (ttm)	US$ in thousands	760,800	894,600	918,400	1,004,400	1,027,400	950,000	918,700	851,900	833,200	834,400	811,200	774,500	764,000	811,900	810,900	795,500	768,200	1,008,900	964,200	2,318,700
Inventory	US$ in thousands	1,879,500	1,720,000	1,681,800	1,457,200	1,302,100	1,134,000	1,102,300	966,800	989,200	978,500	1,188,400	1,271,900	1,310,000	1,267,300	1,279,800	1,195,900	1,169,200	1,051,300	1,034,400	946,600
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

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $760,800K ÷ $1,879,500K
= 0.40

The inventory turnover ratio measures how efficiently a company manages its inventory by analyzing how many times a company sells and replaces its inventory over a specific period.

Based on the data provided for American Electric Power Company Inc., we observe a fluctuating trend in the inventory turnover ratio over the past eight quarters:

- In Q4 2023, the inventory turnover ratio stood at 3.50, indicating that the company sold and replaced its inventory approximately 3.50 times during the quarter. This suggests a decrease in the efficiency of inventory management compared to the previous quarter.
- In Q3 2023, the ratio increased to 3.96, showing some improvement in inventory turnover efficiency compared to Q4 2023.
- The trend continues with an upward trajectory in Q2 2023 with a ratio of 4.26, further improving the efficiency of inventory turnover.
- The most significant improvement is seen in Q1 2023, with an inventory turnover ratio of 5.01, indicating that the company sold and replenished its inventory over five times during the quarter, showcasing enhanced efficiency in inventory management.
- Comparing the data to the previous year, the inventory turnover ratios in Q4, Q3, Q2, and Q1 of 2022 were higher, ranging from 5.30 to 5.75, indicating a more efficient inventory turnover process during that period.

Overall, the trend in the inventory turnover ratio for American Electric Power Company Inc. shows some variability, with fluctuations in efficiency levels over the past quarters. This suggests potential shifts in inventory management strategies or changes in demand patterns that impacted the company's inventory turnover performance.