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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. American Electric Power Co's Operating Income for the three months ended in Jun. 2024 was $826 Mil. American Electric Power Co's Interest Expense for the three months ended in Jun. 2024 was $-466 Mil. American Electric Power Co's interest coverage for the quarter that ended in Jun. 2024 was 1.77. The higher the ratio, the stronger the company's financial strength is.
Warning Sign:
Ben Graham prefers companies' interest coverage to be at least 5. American Electric Power Co Inc interest coverage is 2.21, which is low.
The historical rank and industry rank for American Electric Power Co's Interest Coverage or its related term are showing as below:
Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.
The historical data trend for American Electric Power Co's Interest Coverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
American Electric Power Co Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Interest Coverage | Get a 7-Day Free Trial | 2.56 | 2.56 | 2.85 | 2.71 | 2.07 |
American Electric Power Co Quarterly Data | ||||||||||||||||||||
Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | |
Interest Coverage | Get a 7-Day Free Trial | 1.90 | 2.88 | 1.50 | 2.69 | 1.77 |
For the Utilities - Regulated Electric subindustry, American Electric Power Co's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Utilities - Regulated industry and Utilities sector, American Electric Power Co's Interest Coverage distribution charts can be found below:
* The bar in red indicates where American Electric Power Co's Interest Coverage falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
If Interest Expense is negative and Operating Income is positive, then
Interest Coverage | = | -1 | * | Operating Income | / | Interest Expense |
Else if Interest Expense is negative and Operating Income is negative, then
The company did not have earnings to cover the interest expense. |
Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then
The company had no debt (1). |
Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.
American Electric Power Co's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as
Here, for the fiscal year that ended in Dec. 2023, American Electric Power Co's Interest Expense was $-1,807 Mil. Its Operating Income was $3,735 Mil. And its Long-Term Debt & Capital Lease Obligation was $38,172 Mil.
Interest Coverage | = | -1 | * | Operating Income (A: Dec. 2023 ) | / | Interest Expense (A: Dec. 2023 ) |
= | -1 | * | 3734.5 | / | -1806.9 | |
= | 2.07 |
American Electric Power Co's Interest Coverage for the quarter that ended in Jun. 2024 is calculated as
Here, for the three months ended in Jun. 2024, American Electric Power Co's Interest Expense was $-466 Mil. Its Operating Income was $826 Mil. And its Long-Term Debt & Capital Lease Obligation was $40,487 Mil.
Interest Coverage | = | -1 | * | Operating Income (Q: Jun. 2024 ) | / | Interest Expense (Q: Jun. 2024 ) |
= | -1 | * | 826.4 | / | -465.6 | |
= | 1.77 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The higher the ratio, the stronger the company's Financial Strength is.
American Electric Power Co (NAS:AEP) Interest Coverage Explanation
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
Thank you for viewing the detailed overview of American Electric Power Co's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.
Antonio P Smyth | officer: Executive Vice President | 1 RIVERSIDE PLAZA, COLUMBUS OH 43215 |
Greg B Hall | officer: Executive Vice President | 1 RIVERSIDE PLAZA, COLUMBUS OH 43215 |
Daniel G. Stoddard | director | 5000 DOMINION BOULEVARD, GLEN ALLEN VA 23060 |
Kate Sturgess | officer: Controller, CAO | 2244 WALNUT GROVE AVENUE, ROSEMEAD CA 91770 |
David Matthew Feinberg | officer: Senior Vice President | C/O ALLEGHENY ENERGY, INC., 800 CABIN HILL DRIVE, GREENSBURG PA 15601 |
Christian T Beam | officer: Executive Vice President | 1 RIVERSIDE PLAZA, COLUMBUS OH 43215 |
Nicholas K Akins | officer: Executive Vice President | AMERICAN ELECTRIC POWER COMPANY, INC., 1 RIVERSIDE PLAZA, COLUMBUS OH 43215 |
Ann P Kelly | officer: Executive Vice President & CFO | 460 NORTH GULPH ROAD, KING OF PRUSSIA PA 19406 |
Peggy Simmons | officer: Executive Vice President | 212 E 6TH ST, TULSA OK 74119 |
Raja Sundararajan | officer: Executive Vice President | 1 RIVERSIDE PLAZA, COLUMBUS OH 43215 |
Donna James | director | ONE MIRANOVA PLACE, SUITE 1040, COLUMBUS OH 43215 |
Therace Risch | officer: Senior Vice President | 6501 LEGACY DRIVE, PLANO TX 75024 |
Charles E Zebula | officer: Executive Vice President | 1 RIVERSIDE PLAZA, COLUMBUS OH 43215 |
Paul Iii Chodak | officer: Executive Vice President | 1 RIVERSIDE PLAZA, COLUMBUS OH 43215 |
Julia A Sloat | officer: Executive VP, CFO | 1 RIVERSIDE PLAZA, COLUMBUS OH 43215 |
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