Southern Company (SO)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 78.14 | 79.13 | 77.31 | 83.08 | 90.32 | 75.71 | 63.80 | 55.17 | 52.93 | 56.80 | 54.08 | 54.89 | 65.85 | 67.92 | 67.01 | 73.08 | 86.67 | 85.16 | 80.24 | 71.58 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 78.14 | 79.13 | 77.31 | 83.08 | 90.32 | 75.71 | 63.80 | 55.17 | 52.93 | 56.80 | 54.08 | 54.89 | 65.85 | 67.92 | 67.01 | 73.08 | 86.67 | 85.16 | 80.24 | 71.58 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.14 + — – —
= 78.14
The cash conversion cycle of Southern Company has shown fluctuations over the years based on the provided data. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 52.93 days to a high of 90.32 days. The trend indicates variability in the company's ability to manage its working capital efficiently during this period.
A lower cash conversion cycle implies that the company is able to generate cash more quickly from its operations, indicating effective management of inventory, accounts receivable, and accounts payable. Conversely, a higher cash conversion cycle suggests inefficiencies in the management of working capital, potentially leading to cash flow challenges.
It is important for Southern Company to closely monitor its cash conversion cycle to ensure optimal cash flow management, improve liquidity, and sustain overall financial health. Analyzing the trend in the cash conversion cycle can provide valuable insights into the company's operational efficiency and working capital management practices.
Peer comparison
Dec 31, 2024