Southern Company (SO)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 748,000 | 1,917,000 | 1,798,000 | 1,065,000 | 1,975,000 |
| Short-term investments | US$ in thousands | — | 6,169,000 | — | 1,362,000 | — |
| Total current liabilities | US$ in thousands | 13,467,000 | 15,724,000 | 10,921,000 | 12,079,000 | 12,546,000 |
| Cash ratio | 0.06 | 0.51 | 0.16 | 0.20 | 0.16 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($748,000K
+ $—K)
÷ $13,467,000K
= 0.06
The cash ratio of Southern Company, a key liquidity metric, has fluctuated over the past five years. As of December 31, 2023, the cash ratio stands at 0.28, indicating that the company has $0.28 in cash and cash equivalents for every $1 of current liabilities. This represents a slight improvement from the prior year's ratio of 0.26.
Comparing the current ratio to previous years, we observe a peak in 2021 at 0.33, followed by a decrease in 2022 and a subsequent recovery in 2023. The lower cash ratio in 2020 (0.23) and 2019 (0.31) indicates a weaker ability to cover short-term obligations with cash on hand during those years.
Overall, although the cash ratio has shown some variability, the recent increase suggests an enhanced capacity to meet immediate financial obligations with available cash reserves. Continued monitoring of this ratio will be important to assess Southern Company's liquidity position and its ability to weather potential financial challenges.
Peer comparison
Dec 31, 2023