American Electric Power Co Inc (AEP)

Debt-to-capital ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Long-term debt US$ in thousands 39,307,800 37,652,700 34,314,600 31,300,700 28,986,400
Total stockholders’ equity US$ in thousands 26,943,800 25,246,700 23,893,400 22,433,200 20,550,900
Debt-to-capital ratio 0.59 0.60 0.59 0.58 0.59

December 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $39,307,800K ÷ ($39,307,800K + $26,943,800K)
= 0.59

The debt-to-capital ratio of American Electric Power Co Inc has been relatively stable over the past five years, ranging from 0.58 to 0.60. This indicates that the company's level of debt compared to its total capital structure has been consistent. A ratio of around 0.60 suggests that the company relies more on debt financing rather than equity to fund its operations and investments. It is essential for stakeholders to monitor this ratio to ensure that the company's debt levels remain at a manageable and sustainable level. A consistent ratio may indicate a stable financial position, but potential changes in market conditions could impact the company's ability to service its debt in the long run. Further analysis of this ratio in conjunction with other financial metrics would provide a more comprehensive understanding of the company's overall financial health and risk profile.