American Electric Power Company Inc (AEP)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	3,556,200	3,482,700	3,411,300	2,987,700	2,592,300
Long-term debt	US$ in thousands	37,652,700	34,314,600	31,300,700	28,986,400	25,126,800
Total stockholders’ equity	US$ in thousands	25,246,700	23,893,400	22,433,200	20,550,900	19,632,200
Return on total capital		5.65%	5.98%	6.35%	6.03%	5.79%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,556,200K ÷ ($37,652,700K + $25,246,700K)
= 5.65%

American Electric Power Company Inc.'s return on total capital has been relatively stable over the past five years, ranging from 5.56% to 6.01%. The company's ability to generate returns on the capital employed has shown consistency, with only slight fluctuations year over year. This indicates that American Electric Power Company Inc. has been efficient in utilizing its total capital to generate profits. The return on total capital above 5% indicates that the company is effectively managing its financial resources to create value for its stakeholders. Overall, the consistency in return on total capital suggests that American Electric Power Company Inc. has a sound financial management strategy in place.