American Electric Power Company Inc (AEP)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,434,500	1,556,800	1,400,700	1,297,500	1,214,000
Payables	US$ in thousands	2,032,500	2,670,800	2,054,600	1,709,700	2,085,800
Payables turnover		0.71	0.58	0.68	0.76	0.58

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,434,500K ÷ $2,032,500K
= 0.71

The payables turnover ratio for American Electric Power Company Inc. has shown a consistent improvement over the past five years, indicating a more efficient management of payables. The ratio has increased from 2.45 in 2019 to 3.24 in 2023. This suggests that the company is paying off its suppliers more frequently within the year, which could lead to better relationships with suppliers and potential discounts for early payments. The increasing trend in payables turnover is a positive sign of effective working capital management and liquidity.