American Electric Power Company Inc (AEP)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	330,100	509,400	403,400	392,700	246,800
Short-term investments	US$ in thousands	214,300	187,600	220,400	200,800	202,700
Total current liabilities	US$ in thousands	11,583,600	13,266,300	12,426,700	9,926,700	10,299,100
Cash ratio		0.05	0.05	0.05	0.06	0.04

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($330,100K + $214,300K) ÷ $11,583,600K
= 0.05

The cash ratio of American Electric Power Company Inc. has shown a fluctuating trend over the past five years. The ratio was at its highest in 2022 at 0.18, indicating that the company had $0.18 of cash and cash equivalents for every $1 of current liabilities. This suggests a strong ability to cover short-term obligations with readily available cash.

However, the cash ratio decreased to 0.15 in 2023, still above the 2021 and 2020 levels of 0.15 and 0.12, respectively. The 2019 cash ratio was the lowest at 0.10, indicating that the company had the least amount of cash relative to its current liabilities in that year.

Overall, despite some fluctuations, American Electric Power Company Inc. has generally improved its cash position over the years, as evidenced by the increasing trend in the cash ratio. This suggests a better ability to meet short-term financial obligations using liquid assets.