Aureus
FRed Flag

American Electric Power Company(AEP)

F

Financial data as of Dec 31, 2025Improving · Utilities

FCF Margin-7.5%Free Cash Flow / Revenue
Cash Conversion194.0%Operating CF / Net Income
Free Cash Flow-$1.6B
Revenue$21.9B
Net Cash-$49.3BNet debt position
Debt / FCFN/AElevated debt burden
Current Ratio0.45Tight short-term liquidity
YoY FCF Growth+12.4%1 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseF
→
-1Current ratio below 1.0 (0.45)
→
-1Negative FCF in 3 of last 4 quarters
→
+0.5Modest YoY FCF growth (12.4% YoY)
→
-1Only 1 positive quarters recently
→
-0.5Highly volatile FCF (consistency: 2.60)
→
FinalF

Analysis Summary

Strengths

  • Excellent cash conversion (194%)
  • FCF trend is improving

Concerns

  • Negative FCF margin (-7.5%)
  • Net debt position ($49.3B)
  • Current ratio below 1.0 — tight short-term liquidity
  • Only 1 positive FCF quarters recently
  • Highly volatile quarterly FCF
Heavy CapEx — Operating cash flow is strong (32% margin) but most is reinvested

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin-7.5%
Net Margin16.4%
Operating CF Margin31.7%
CapEx Ratio39.2%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$49.3BNet debt position
Debt / FCFN/AElevated debt burden
Current Ratio0.45Tight liquidity
Debt / Equity1.59Moderate leverage

Quarterly FCF Trend

+12.4% YoYImproving (+12.4%)

Free cash flow per quarter

Sector Comparison — Utilities

FCF Margin ranked against sector peers

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Detailed Metrics

Company NameAmerican Electric Power Company
SectorUtilities
Free Cash Flow-$1.6B
Revenue$21.9B
Net Income$3.6B
Operating Cash Flow$6.9B
Capital Expenditure$8.6B
FCF Margin-7.5%
Cash Conversion Rate194.0%
Net Margin16.4%
Total Debt$49.5B
Total Cash$197.0M
Net Cash-$49.3B
Current Ratio0.45
Debt / Equity1.59
Debt / FCFN/A
YoY FCF Growth+12.4%
Positive Quarters1 of 5
Trend DirectionImproving
Report DateDec 31, 2025
GradeF
Data SourceYahoo Finance

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