Southern Company (SO)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,070,000 | 748,000 | 1,917,000 | 1,798,000 | 1,065,000 |
| Short-term investments | US$ in thousands | — | 2,424,000 | 6,169,000 | — | 1,362,000 |
| Total current liabilities | US$ in thousands | 15,993,000 | 13,467,000 | 15,724,000 | 10,921,000 | 12,079,000 |
| Cash ratio | 0.07 | 0.24 | 0.51 | 0.16 | 0.20 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,070,000K
+ $—K)
÷ $15,993,000K
= 0.07
The cash ratio of Southern Company has fluctuated over the years based on the data provided. As of December 31, 2020, the cash ratio was 0.20, indicating that the company had $0.20 in cash and cash equivalents for every $1 of current liabilities.
By December 31, 2021, the cash ratio had decreased to 0.16, suggesting that the company's ability to cover its short-term obligations with its cash holdings had slightly weakened.
However, by the end of 2022, the cash ratio significantly improved to 0.51, indicating that the company had bolstered its liquidity position, potentially increasing its ability to meet its short-term financial commitments.
Subsequently, the cash ratio dropped to 0.24 by December 31, 2023, before experiencing a more substantial decline to 0.07 by the end of 2024. These lower ratios may suggest a decrease in the company's liquidity position, potentially raising concerns about its ability to cover immediate liabilities solely with cash and cash equivalents.
In conclusion, the fluctuation in Southern Company's cash ratio over the years reflects varying levels of liquidity and highlights the importance of monitoring the company's ability to meet short-term obligations through its cash resources.
Peer comparison
Dec 31, 2024