American Electric Power Company Inc (AEP)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 96,684,000 | 93,403,300 | 87,668,700 | 80,757,200 | 75,892,300 |
| Total stockholders’ equity | US$ in thousands | 25,246,700 | 23,893,400 | 22,433,200 | 20,550,900 | 19,632,200 |
| Financial leverage ratio | 3.83 | 3.91 | 3.91 | 3.93 | 3.87 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $96,684,000K ÷ $25,246,700K
= 3.83
The financial leverage ratio of American Electric Power Company Inc. has shown a fluctuating trend over the past five years. The ratio ranged from 3.82 in 2023 to 3.93 in 2020. Generally, a higher financial leverage ratio indicates a higher level of financial risk, as it implies that the company is relying more on debt financing rather than equity.
In this case, the company's financial leverage ratio has been relatively stable within the range of 3.82 to 3.93, with a slight decrease in 2023 compared to the previous years. This could suggest that the company has been managing its debt levels effectively or may have adjusted its capital structure during the year.
Overall, while the financial leverage ratio fluctuated, it remained within a reasonable range, indicating that American Electric Power Company Inc. has maintained a balanced mix of debt and equity in its capital structure to support its operations and growth.
Peer comparison
Dec 31, 2023