American Electric Power Company Inc (AEP)

Solvency ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Debt-to-assets ratio	0.39	0.39	0.38	0.38	0.37	0.37	0.36	0.34	0.36	0.37	0.36	0.36	0.36	0.36	0.34	0.33	0.33	0.33	0.33	0.32
Debt-to-capital ratio	0.60	0.59	0.61	0.60	0.59	0.58	0.58	0.56	0.58	0.59	0.59	0.59	0.59	0.58	0.57	0.57	0.56	0.55	0.56	0.54
Debt-to-equity ratio	1.49	1.45	1.54	1.53	1.44	1.39	1.37	1.30	1.40	1.44	1.43	1.44	1.41	1.38	1.33	1.31	1.28	1.25	1.26	1.19
Financial leverage ratio	3.83	3.76	4.02	3.98	3.91	3.76	3.78	3.78	3.91	3.88	3.95	3.96	3.93	3.86	3.89	3.94	3.87	3.75	3.77	3.68

Solvency ratios are crucial for assessing a company's ability to cover its long-term debt obligations. Looking at American Electric Power Company Inc.'s solvency ratios over the past eight quarters, we can observe some trends.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. American Electric Power has maintained a relatively stable debt-to-assets ratio in the range of 0.41 to 0.46 over the past two years, indicating a conservative approach to debt management.

2. Debt-to-capital ratio: This ratio reflects the percentage of the company's capital that is financed by debt. American Electric Power's debt-to-capital ratio has also shown consistency, hovering around 0.61 to 0.65 during the period under review. This suggests a balanced mix of debt and equity in the company's capital structure.

3. Debt-to-equity ratio: The debt-to-equity ratio signifies the company's reliance on debt relative to shareholders' equity. American Electric Power's debt-to-equity ratio has seen some fluctuations, ranging from 1.55 to 1.84 over the past two years. These fluctuations may indicate varying levels of risk associated with the company's capital structure.

4. Financial leverage ratio: The financial leverage ratio measures the company's total assets relative to shareholders' equity. American Electric Power's financial leverage ratio has displayed consistency within the range of 3.75 to 4.01 during the analyzed period. This stability suggests that the company is effectively utilizing leverage to support its operations and growth.

Overall, American Electric Power Company Inc. appears to maintain a sound solvency position based on the stability and reasonable levels of its solvency ratios over the past eight quarters. However, fluctuations in the debt-to-equity ratio warrant further monitoring to assess the evolving risk profile of the company's capital structure.

Coverage ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Interest coverage	1.94	1.98	2.00	2.11	2.44	2.71	3.03	3.02	2.84	2.79	2.68	2.62	2.56	2.32	2.37	2.30	2.42	2.76	2.52	2.75

American Electric Power Company Inc.'s interest coverage ratio has shown fluctuations over the past 8 quarters. The ratio ranged from a low of 2.10 in Q4 2023 to a high of 3.94 in Q2 2022. Generally, a higher interest coverage ratio indicates a company's ability to meet its interest payment obligations more comfortably. A downward trend in the ratio over time could indicate potential challenges in servicing debt obligations, while an upward trend suggests improving financial health and reduced financial risk. It would be essential to further investigate the underlying factors contributing to the fluctuations in the interest coverage ratio to assess the long-term sustainability of the company's debt repayment capabilities.