Southern Company (SO)

Days of inventory on hand (DOH)

		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
DOH	days	199.14	90.33	52.94	65.86	86.67

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.83
= 199.14

The Days of Inventory on Hand (DOH) ratio for Southern Company, a measure of how efficiently the company manages its inventory, has shown some fluctuations over the years.

As of December 31, 2020, the company had an inventory turnover cycle of 86.67 days, indicating that on average, it took 86.67 days for Southern Company to sell its inventory.

By the end of December 31, 2021, the DOH decreased to 65.86 days, implying an improvement in inventory management efficiency compared to the previous year.

The trend continued into December 31, 2022, with the DOH further declining to 52.94 days, suggesting that the company was managing its inventory more effectively during this period.

However, there was a notable increase in DOH by the end of December 31, 2023, reaching 90.33 days, which could indicate potential challenges in inventory management efficiency during that year.

The most significant change occurred by December 31, 2024, with the DOH spiking to 199.14 days. This substantial increase raises concerns about potential overstocking or inefficiencies in inventory management practices that may have occurred during that period.

In conclusion, while there have been fluctuations in Southern Company's Days of Inventory on Hand ratio over the years, it is essential for the company to consistently monitor and optimize its inventory management practices to ensure efficient operations and cost-effectiveness.