American Electric Power Company Inc (AEP)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 92.44% | 92.07% | 91.66% | 91.30% | 92.20% |
| Operating profit margin | 18.73% | 17.73% | 20.32% | 20.03% | 16.66% |
| Pretax margin | 11.92% | 11.78% | 15.51% | 15.02% | 12.26% |
| Net profit margin | 11.63% | 11.75% | 14.82% | 14.75% | 12.35% |
American Electric Power Company Inc. has shown a consistent trend in its profitability ratios over the past five years. The gross profit margin has remained relatively stable, ranging from 63.86% to 70.71%, with a slight increase in 2023 compared to the previous year. This indicates that the company has been able to maintain a high level of profitability on its sales after accounting for the cost of goods sold.
The operating profit margin has also shown stability, fluctuating between 17.66% and 20.38% over the same period. In 2023, the operating profit margin increased to 19.67% from 19.05% in 2022, indicating that the company has been effective in managing its operating expenses to generate operating profits.
The pretax margin reflects the profitability of the company before accounting for taxes and has shown a gradual increase from 11.77% in 2022 to 11.94% in 2023. This suggests that American Electric Power Company Inc. has been successful in improving its profitability at the pre-tax level.
The net profit margin, which represents the company's profitability after all expenses have been deducted, has displayed a similar trend to the pretax margin, with a slight increase in 2023 compared to 2022. The net profit margin has ranged from 11.63% to 14.82% over the past five years, indicating that the company has been able to consistently convert its revenue into profits.
Overall, American Electric Power Company Inc. has demonstrated strong profitability ratios over the years, reflecting its ability to effectively manage costs, generate operating profits, and improve overall profitability both before and after taxes.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.68% | 3.73% | 3.89% | 3.70% | 3.42% |
| Return on assets (ROA) | 2.28% | 2.47% | 2.84% | 2.72% | 2.53% |
| Return on total capital | 5.65% | 5.98% | 6.35% | 6.03% | 5.79% |
| Return on equity (ROE) | 8.75% | 9.66% | 11.09% | 10.71% | 9.79% |
American Electric Power Company Inc.'s profitability ratios have shown mixed performance over the past five years.
- Operating return on assets (Operating ROA) has ranged from 3.62% in 2019 to 4.00% in 2022, indicating the company's ability to generate operating income relative to its assets has been relatively stable, with a slight decline in the most recent year to 3.86%.
- Return on assets (ROA) has fluctuated from 2.28% in 2023 to 2.84% in 2021. This ratio reflects the overall profitability of the company's assets and has shown some variability over the years, dropping to 2.28% in the latest period.
- Return on total capital has ranged from 5.56% in 2023 to 6.01% in 2021. This ratio provides a measure of the overall return generated on both debt and equity capital employed by the company, showing a slight decrease in the most recent year to 5.56%.
- Return on equity (ROE) has varied from 8.73% in 2023 to 11.09% in 2021. ROE measures the return generated on shareholder equity and has shown significant fluctuations, with a decline to 8.73% in the latest period.
Overall, while American Electric Power Company Inc. has maintained relatively stable Operating ROA and ROA levels, the company has experienced some declines in ROE and ROTC in the most recent year, indicating potential challenges in generating returns for shareholders and total capital providers.