American Electric Power Co Inc (AEP)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 103.18 | 478.23 | 305.28 | 257.77 | 368.52 |
| Days of sales outstanding (DSO) | days | 56.21 | 53.51 | 54.97 | 49.29 | 55.70 |
| Number of days of payables | days | 158.68 | 517.16 | 626.18 | 535.40 | 480.96 |
| Cash conversion cycle | days | 0.71 | 14.58 | -265.93 | -228.34 | -56.74 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 103.18 + 56.21 – 158.68
= 0.71
The cash conversion cycle of American Electric Power Co Inc has exhibited significant fluctuations over the years, ranging from a low of -265.93 days to a high of 14.58 days. A negative cash conversion cycle indicates that the company is able to collect cash from customers before paying its suppliers and vendors, which can be advantageous for managing working capital. However, the sudden shift to positive days in 2023 and 2024 suggests a change in the company's operating efficiency and potentially a delay in collecting cash from customers compared to paying its obligations. Overall, a negative cash conversion cycle is generally favorable as it signifies effective cash management, but attention should be paid to the recent trend towards positive days to ensure sustainable financial health.
Peer comparison
Dec 31, 2024