American Electric Power (AEP) 10-K Red Flags
Risk signals extracted deterministically from American Electric Power’s SEC 10-K/10-Q XBRL filings — no LLM, every finding cites the underlying data.
Detected red flags (18)
- Receivables outpacing revenue: Accounts receivable grew +7.5% YoY vs revenue growth of -3.3%. The +10.9% spread suggests extended credit terms, channel stuffing risk, or collection deterioration. Investigate the allowance for doubtful accounts and DSO trend.
- Earnings-cash flow divergence: Net income grew +60.3% while operating cash flow declined -5.2%. This divergence may indicate accrual-based earnings inflation — non-cash gains, aggressive revenue recognition, or working capital absorption. The accrual ratio (NI − OCF) is deteriorating.
- NEW: Going concern doubt in latest filing: The term "going concern" appears in recent 10-K/10-Q filings but was NOT present in the prior 24-month period. This is a new risk disclosure that warrants attention. Found in 3 filing(s).
- Material weakness in internal controls: The term "material weakness" appears in 22 recent filing(s) (vs 2 in the prior period). This risk language is ongoing.
- NEW: Substantial doubt about ability to continue in latest filing: The term "substantial doubt" "ability to continue" appears in recent 10-K/10-Q filings but was NOT present in the prior 24-month period. This is a new risk disclosure that warrants attention. Found in 1 filing(s).
- Restatement of financial statements: The term "restate" "financial statements" appears in 19 recent filing(s) (vs 2 in the prior period). This risk language is ongoing.
- Endogenous analysis: Revenue grew -3.3% but receivables grew +7.5% — the receivables-to-revenue gap suggests growth may be partially driven by extended credit terms rather than genuine demand. If DSO continues to rise, a revenue reversal or bad-debt charge could follow.
- Endogenous analysis: "Material weakness in internal controls" combined with earnings-cash flow divergence is especially concerning — it suggests the reported earnings may not be reliable due to control deficiencies, and the cash flow shortfall may be masking underlying issues.
- 1 new XBRL disclosure(s) in latest filing — expanding reporting scope.
- 20 disclosure(s) dropped from prior year — reduced reporting granularity.
- 3 new risk-language term(s) detected in filing text: Going concern doubt, Substantial doubt about ability to continue, Off-balance sheet arrangements.
- Ongoing high-severity risk language: Material weakness in internal controls, Restatement of financial statements.
- Revenue declined **+3.3%** YoY to $18.98B.
- 5-year revenue CAGR **+4.1%**; 10y CAGR +1.7%.
- Composite risk: Elevated.
- Leverage debt/equity 1.56 (moderate).
- Receivables outpacing revenue: Accounts receivable grew +7.5% YoY vs revenue growth of -3.3%. The +10.9% spread suggests extended credit terms, channel stuffing risk, or collection deterioration. Investigate the allowance for doubtful accounts and DSO trend.
- Earnings-cash flow divergence: Net income grew +60.3% while operating cash flow declined -5.2%. This divergence may indicate accrual-based earnings inflation — non-cash gains, aggressive revenue recognition, or working capital absorption. The accrual ratio (NI − OCF) is deteriorating.
Filings & ownership
- Latest annual report (10-K) filed Feb 12, 2026.
- Latest quarterly report (10-Q) filed May 5, 2026.
- 11 recent 8-K material-event filings in the index.
- Recent insider Form 4s: 0 buy vs 0 sell transactions.
- ~10,000+ recent 13F-HR filings reference American Electric Power; broad institutional reporting.
- Recent filers include ZOLA CAPITAL MANAGEMENT LLC, UNIZAN FINANCIAL SERVICES GROUP NATIONAL ASSOCIATION, ZOLA CAPITAL MANAGEMENT LLC.
- 20 recent 13G passive institutional ownership notices.
Full AEP analyst report
Valuation (DCF & Graham), technicals, macro exposure, risk scorecard and 13F/13D ownership.
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