American Electric Power Company Inc (AEP)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	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
Receivables	US$ in thousands	2,783,100	2,957,600	2,267,500	2,276,700	1,927,500
Total current liabilities	US$ in thousands	11,583,600	13,266,300	12,426,700	9,926,700	10,299,100
Quick ratio		0.29	0.28	0.23	0.29	0.23

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($330,100K + $214,300K + $2,783,100K) ÷ $11,583,600K
= 0.29

The quick ratio of American Electric Power Company Inc. has shown a gradual improvement over the past five years, increasing from 0.26 in 2019 to 0.36 in both 2022 and 2023. This ratio indicates the company's ability to meet its short-term obligations with its most liquid assets.

Although the quick ratio remains relatively low, hovering around 0.3 to 0.36, it suggests that American Electric Power may face challenges in quickly covering its current liabilities using its readily available assets. This could be a concern for the company's short-term financial health and liquidity position.

It is essential for American Electric Power Company Inc. to continue monitoring and managing its liquidity effectively to ensure it can meet its short-term obligations without relying too heavily on liquidating assets. Further improvements in the quick ratio would enhance the company's ability to withstand unexpected financial shocks and maintain stability in its operations.