Southern Company (SO)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		10.18	14.16	13.38	12.46	13.69
DSO	days	35.86	25.77	27.29	29.29	26.67

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 10.18
= 35.86

Southern Company's Days of Sales Outstanding (DSO) measures how long it takes for the company to collect payments from its customers after making a sale. A lower DSO indicates a more efficient collection process, while a higher DSO may suggest issues with collecting receivables in a timely manner.

From 2019 to 2020, there was a significant increase in DSO from 58.09 days to 59.74 days, indicating a potential slowdown in the collection of payments. However, in the following years, the trend reversed with a decrease in DSO to 46.78 days in 2021, 46.32 days in 2022, and 47.22 days in 2023.

The declining trend in DSO after 2020 suggests that Southern Company has improved its efficiency in collecting payments from customers, which could be attributed to better credit management practices or more prompt invoicing and collection processes.

Overall, the decreasing trend in DSO over the years indicates that Southern Company has been successful in managing its accounts receivable effectively and ensuring timely collection of payments, which is a positive sign for the company's financial health and liquidity.