Southern Company (SO)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,890,000 | 2,130,000 | 1,764,000 | 1,718,000 | 1,889,000 |
| Payables | US$ in thousands | 2,898,000 | 3,525,000 | 2,169,000 | 2,312,000 | 2,115,000 |
| Payables turnover | 0.65 | 0.60 | 0.81 | 0.74 | 0.89 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,890,000K ÷ $2,898,000K
= 0.65
The payables turnover ratio measures how efficiently a company manages its payables by comparing the cost of goods sold to average accounts payable. The higher the ratio, the faster the company is paying its suppliers.
Over the past five years, Southern Company's payables turnover ratio has fluctuated. In 2023, the payables turnover ratio was 2.57, which indicates that the company paid its suppliers approximately 2.57 times during the year. This represents a decrease from the previous year's ratio of 3.36.
Comparing the trend over the five-year period, Southern Company's payables turnover ratio has varied, with the highest ratio of 3.36 in 2022 and the lowest ratio of 2.19 in 2020. The fluctuations in the payables turnover ratio suggest changes in the company's payment practices and efficiency in managing its payables.
It is important for investors and analysts to further investigate the reasons behind these fluctuations in the payables turnover ratio to understand Southern Company's financial management practices and relationships with suppliers.
Peer comparison
Dec 31, 2023