American Electric Power Co Inc (AEP)

Current ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Total current assets US$ in thousands 5,788,800 6,082,100 6,775,500 7,809,200 4,351,500
Total current liabilities US$ in thousands 13,009,300 11,583,600 13,266,300 12,426,700 9,926,700
Current ratio 0.44 0.53 0.51 0.63 0.44

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $5,788,800K ÷ $13,009,300K
= 0.44

The current ratio of American Electric Power Co Inc has fluctuated over the past five years. As of December 31, 2020, the current ratio was 0.44, indicating that the company may have had difficulty meeting its short-term obligations with its current assets alone. The ratio improved in the following year to 0.63, suggesting a better ability to cover short-term liabilities with current assets.

However, in the subsequent years, the current ratio decreased to 0.51 in 2022, 0.53 in 2023, and 0.44 in 2024. These declining ratios may raise concerns about the company's liquidity position and its ability to meet short-term obligations comfortably. It is essential for stakeholders to closely monitor this trend and assess the company's liquidity management strategies to ensure financial stability and solvency in the future.