Southern Company (SO)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.83 | 4.04 | 6.90 | 5.54 | 4.21 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | — | — | — | — |
Based on the provided data for Southern Company's activity ratios, we observe the following trends:
1. Inventory Turnover: The inventory turnover ratio measures how efficiently a company manages its inventory. Southern Company's inventory turnover has shown an increasing trend over the years, from 4.21 in 2020 to 6.90 in 2022, indicating that the company is selling its inventory more quickly. However, there was a significant decrease in 2024 to 1.83, which may suggest potential issues with inventory management or a slowdown in sales.
2. Receivables Turnover: The receivables turnover ratio helps evaluate how efficiently a company collects its accounts receivables. In this case, the data shows that there was no information available for receivables turnover for any of the years provided. This lack of data limits our ability to assess the efficiency of Southern Company's accounts receivable collection process.
3. Payables Turnover: The payables turnover ratio assesses how efficiently a company pays its suppliers. Similar to receivables turnover, there is no data available for payables turnover for any of the years provided. As a result, we cannot analyze Southern Company's payment practices to suppliers based on this ratio.
4. Working Capital Turnover: The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales. Unfortunately, there is no data available for the working capital turnover ratio for any of the years provided. Consequently, we are unable to evaluate how efficiently Southern Company is utilizing its working capital in generating revenue.
In conclusion, while we see improvements in the inventory turnover ratio for Southern Company over the years, the lack of data for receivables turnover, payables turnover, and working capital turnover limits a more comprehensive analysis of the company's overall activity ratios. It would be beneficial to obtain additional information in these areas to gain a better understanding of Southern Company's operational efficiency and financial management practices.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 199.14 | 90.33 | 52.94 | 65.86 | 86.67 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The Days of Inventory on Hand (DOH) ratio for Southern Company has exhibited a decreasing trend over the five-year period from 2020 to 2024, indicating that the company has been able to sell its inventory more quickly. The ratio decreased from 86.67 days in 2020 to 52.94 days in 2022 before increasing to 199.14 days in 2024. This fluctuation in 2024 may suggest potential issues related to inventory management that need to be further investigated.
The Days of Sales Outstanding (DSO) and Number of Days of Payables ratios are not available for analysis as the data is not provided. Without this information, it is challenging to assess the efficiency of Southern Company's accounts receivable collection and payables management processes.
Overall, based on the available data, Southern Company has shown improvement in its inventory turnover efficiency, but further analysis of accounts receivable and payables turnover is needed to gain a comprehensive understanding of the company's overall activity ratios and operational effectiveness.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 0.31 | 0.25 | 0.23 |
| Total asset turnover | 0.18 | 0.18 | 0.22 | 0.18 | 0.17 |
The fixed asset turnover ratio for Southern Company has shown a slight increase over the years, from 0.23 in 2020 to 0.31 in 2022. This indicates that the company is generating more revenue relative to its investment in fixed assets. However, it is worth noting that the data for 2023 and 2024 is not available.
In terms of total asset turnover, Southern Company's ratio has fluctuated slightly, remaining relatively stable between 0.17 and 0.22 during the period under review. This ratio measures the company's ability to generate sales from its total assets. While there was a peak in 2022, the ratio returned to lower levels in subsequent years.
Overall, the analysis of these long-term activity ratios suggests that Southern Company has been efficient in utilizing its assets to generate revenue, with a notable improvement in fixed asset turnover. However, further examination of the missing data points for 2023 and 2024 would provide a more comprehensive assessment of the company's long-term asset utilization.