American Electric Power Company Inc (AEP)
Activity ratios
Short-term
Turnover ratios
| 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 |
| Receivables turnover | 6.82 | 6.44 | 7.06 | 7.35 | 6.64 | 6.66 | 6.62 | 7.74 | 7.41 | 6.39 | 6.26 | 6.88 | 6.55 | 7.23 | 7.61 | 7.69 | 8.07 | 7.52 | 8.10 | 7.75 |
| Payables turnover | 0.37 | 0.40 | 0.38 | 0.44 | 0.38 | 0.42 | 0.42 | 0.50 | 0.41 | 0.52 | 0.49 | 0.45 | 0.45 | 0.49 | 0.50 | 0.50 | 0.37 | 0.57 | 0.57 | 1.55 |
| Working capital turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
The activity ratios of American Electric Power Company Inc. showcase various aspects of its operational efficiency and effectiveness in managing its assets and liabilities.
1. Inventory Turnover: The company's inventory turnover has shown a declining trend over the quarters, indicating that it takes fewer times for the company to sell through its inventory. The lower turnover may suggest efficient inventory management or changes in inventory levels due to varying business demands.
2. Receivables Turnover: The receivables turnover ratio demonstrates how effectively the company is collecting outstanding receivables. The consistency in the receivables turnover ratios indicates the company's ability to efficiently collect payments from its customers over the quarters.
3. Payables Turnover: The payables turnover ratio indicates how quickly the company is paying off its suppliers. The consistent trend in payables turnover suggests the company's stability in managing its payables over time.
4. Working Capital Turnover: The absence of working capital turnover data for all quarters implies that the company may not utilize this specific ratio to evaluate its operational efficiency concerning working capital management. Alternatively, it could indicate that the company does not disclose this particular metric in its financial reporting.
Overall, a detailed analysis of American Electric Power Company Inc.'s activity ratios reflects its operational efficiency in managing inventory, collecting receivables, and handling payables. The consistency in receivables and payables turnover ratios implies a certain level of stability and effectiveness in managing the company's day-to-day operations related to sales and payments.
Average number of days
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (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 |
| Days of sales outstanding (DSO) | days | 53.51 | 56.69 | 51.68 | 49.65 | 54.97 | 54.78 | 55.13 | 47.16 | 49.29 | 57.10 | 58.35 | 53.05 | 55.70 | 50.46 | 47.94 | 47.47 | 45.21 | 48.54 | 45.04 | 47.08 |
| Number of days of payables | days | 975.11 | 921.52 | 967.31 | 824.67 | 948.84 | 860.71 | 873.35 | 725.93 | 900.06 | 698.64 | 738.64 | 803.00 | 816.81 | 746.09 | 732.79 | 731.10 | 991.04 | 639.19 | 639.37 | 235.68 |
The activity ratios of American Electric Power Company Inc. provide insight into the efficiency of its operations.
1. Days of Inventory on Hand (DOH): The DOH ratio shows the average number of days the company holds inventory before it is sold. The trend in DOH fluctuates over the quarters, ranging from 72.82 days in Q1 2023 to 104.28 days in Q4 2023. The increase in DOH implies that the company is holding onto inventory for a longer period, which may indicate slower inventory turnover or excess inventory levels in certain quarters.
2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for the company to collect revenue after making a sale. The DSO trend also varies across quarters, with a range from 41.33 days in Q1 2022 to 48.54 days in Q3 2023. A decrease in DSO indicates improved efficiency in collecting receivables, while an increase could signal potential delays in collecting payments from customers.
3. Number of Days of Payables: This ratio represents the average number of days it takes for the company to pay its suppliers. The trend in the number of days of payables ranges from 113.41 days in Q1 2023 to 137.23 days in Q2 2022. A longer payment period suggests that the company is taking more time to settle its payables, possibly to manage cash flow or negotiate better payment terms with suppliers.
Analyzing these activity ratios collectively can provide a holistic view of American Electric Power Company Inc.'s efficiency in managing inventory, receivables, and payables. Fluctuations in these ratios over the quarters may indicate changes in operational effectiveness, which could impact the company's overall financial performance.
Long-term
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
| Total asset turnover | 0.20 | 0.20 | 0.20 | 0.21 | 0.21 | 0.21 | 0.20 | 0.19 | 0.19 | 0.19 | 0.19 | 0.19 | 0.18 | 0.19 | 0.20 | 0.20 | 0.21 | 0.21 | 0.22 | 0.23 |
American Electric Power Company Inc. has exhibited consistent performance in terms of its long-term activity ratios over the past eight quarters. The fixed asset turnover ratio has remained relatively stable, with values ranging from 0.25 to 0.28. This indicates that the company generated $0.25 to $0.28 in sales for every dollar of fixed assets it owns during the respective quarters.
Similarly, the total asset turnover ratio has also shown stability, ranging between 0.19 and 0.21. This ratio reflects the company's ability to generate sales revenue relative to its total assets. The consistent performance of this ratio suggests that American Electric Power Company Inc. has been efficient in utilizing its total assets to generate revenues over the analyzed period.
Overall, the stability in both the fixed asset turnover and total asset turnover ratios indicates that the company has been effectively managing its long-term assets to drive revenue generation. This trend is favorable as it signifies the company's operational efficiency and effectiveness in utilizing its asset base to support its revenue generation activities.