American Electric Power Co Inc (AEP)

Solvency ratios

Dec 31, 2024 Sep 30, 2024 Mar 31, 2024 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
Debt-to-assets ratio 0.38 0.39 0.40 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
Debt-to-capital ratio 0.59 0.60 0.60 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
Debt-to-equity ratio 1.46 1.47 1.50 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
Financial leverage ratio 3.83 3.76 3.79 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

American Electric Power Co Inc's solvency ratios indicate its ability to meet its long-term financial obligations.

The Debt-to-assets ratio has been gradually increasing over the years, reaching 0.40 as of March 31, 2024. This indicates that 40% of the company's assets are financed by debt.

The Debt-to-capital ratio has shown fluctuations but has generally been increasing, standing at 0.60 as of March 31, 2024. This ratio signifies that 60% of the company's capital is in the form of debt.

The Debt-to-equity ratio has also seen an upward trend, reaching 1.50 as of March 31, 2024. This suggests that the company has significant debt compared to its equity, with the debt being 1.5 times the equity.

The Financial leverage ratio has shown fluctuations but has generally stayed within a narrow range, indicating that the company is maintaining an appropriate level of leverage, standing at 3.79 as of March 31, 2024.

Overall, the gradual increase in the Debt-to-assets, Debt-to-capital, and Debt-to-equity ratios may indicate a higher dependency on debt financing, which could increase the company's financial risk in the long run. It's essential for stakeholders to monitor these ratios to ensure the company maintains a healthy balance between debt and equity to sustain its financial health.

Coverage ratios

Dec 31, 2024 Sep 30, 2024 Mar 31, 2024 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
Interest coverage 36.10 2.40 2.18 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

The interest coverage ratio of American Electric Power Co Inc has shown some fluctuations over the reported periods. The interest coverage ratio measures the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).

From December 31, 2019, to December 31, 2024, the interest coverage ratio ranged from a low of 1.94 to a high of 36.10. This signifies that the company generated enough earnings to cover its interest expense. However, the significant fluctuation in the ratio may indicate varying levels of financial risk and stability.

It is important to note that a higher interest coverage ratio indicates a greater ability to meet interest payments, suggesting a lower risk of default. Conversely, a lower ratio may raise concerns about the company's ability to cover its interest expenses.

Analyzing the trend, there was a general improvement in the interest coverage ratio from the beginning of 2022 through mid-2023. However, there was a notable drop in the ratio in subsequent reporting periods, indicating a potential increase in financial risk or a decline in earnings relative to interest expenses.

Overall, investors and stakeholders should closely monitor American Electric Power Co Inc's interest coverage ratio to assess the company's financial health and ability to service its debt obligations.