Southern Company (SO)

Days of inventory on hand (DOH)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover		0.56	0.39	0.42	0.45	0.46	0.58	0.67	0.82	0.97	0.71	0.79	0.71	0.57	0.84	0.89	0.91	0.66	0.75	0.78	0.91
DOH	days	647.00	939.51	875.70	806.87	799.59	626.88	547.38	447.06	378.00	514.14	464.63	510.95	644.06	435.75	409.74	401.83	552.71	487.79	465.32	399.97

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.56
= 647.00

The days of inventory on hand (DOH) for Southern Company has shown a fluctuating trend over the past eight quarters. In Q4 2023, the DOH increased to 164.18 days from 130.36 days in Q3 2023, marking a significant rise. This indicates that Southern Company held its inventory for a longer period in Q4 2023, which may suggest potential inefficiencies in managing and selling inventory.

Comparing Q4 2023 to the same quarter in the previous year, there was a notable increase from 82.61 days in Q4 2022 to 164.18 days in Q4 2023, almost doubling the inventory holding period. This substantial jump could signify challenges in demand forecasting and inventory control during this period for Southern Company.

Looking at the overall trend, there has been a general increase in DOH since Q1 2022, where the company held inventory for 86.25 days. The trend peaked in Q4 2023 with 164.18 days. The increasing trend in DOH over several quarters may indicate potential risks of excess or obsolete inventory, leading to increased storage costs and potential liquidity issues if the inventory cannot be effectively monetized.

In conclusion, the fluctuating and increasing trend in days of inventory on hand for Southern Company raises concerns about inventory management efficiency and the company's ability to optimize its working capital. Monitoring and potentially improving inventory turnover rates will be crucial for Southern Company to enhance operational effectiveness and profitability.