Southern Company (SO)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 25,253,000 | 29,279,000 | 23,113,000 | 20,375,000 | 21,419,000 |
| Receivables | US$ in thousands | 2,481,000 | 2,067,000 | 1,728,000 | 1,635,000 | 1,565,000 |
| Receivables turnover | 10.18 | 14.16 | 13.38 | 12.46 | 13.69 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $25,253,000K ÷ $2,481,000K
= 10.18
The receivables turnover ratio for Southern Company has been relatively stable over the past five years, ranging from 6.11 to 7.88 times. This ratio measures the efficiency of the company in collecting outstanding receivables from its customers.
A higher receivables turnover ratio indicates that the company is able to collect its accounts receivable more frequently during the year, which is generally positive as it implies quicker cash conversion and lower credit risk. In this case, Southern Company has shown consistent performance in converting its receivables into cash over the years.
Overall, a stable and relatively high receivables turnover ratio for Southern Company suggests effective credit management and collection policies, contributing to its liquidity and financial health. However, further analysis in conjunction with other financial metrics is recommended to provide a more comprehensive assessment of the company's receivables management efficiency.
Peer comparison
Dec 31, 2023