Southern Company (SO)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 92.52% | 92.73% | 92.37% | 91.57% | 91.50% |
| Operating profit margin | 23.07% | 18.34% | 16.00% | 23.98% | 36.12% |
| Pretax margin | 17.71% | 14.79% | 11.57% | 17.31% | 30.52% |
| Net profit margin | 15.74% | 12.07% | 10.42% | 15.38% | 22.13% |
Southern Company's profitability ratios have shown fluctuations over the past five years. The company's gross profit margin has generally been strong, with a high of 75.14% in 2020 and a low of 59.60% in 2022. This ratio indicates that Southern Company has been able to effectively manage its production costs and generate profits from its operations.
The operating profit margin has also been relatively stable, though showing a slight increasing trend from 19.63% in 2022 to 22.80% in 2023. This suggests that the company has been efficient in managing its operating expenses and generating profits from its core business activities.
The pretax margin, which provides insight into the company's profitability before accounting for taxes, has varied significantly over the period. In 2019, the company had a high pretax margin of 30.54%, which decreased to 11.15% in 2021 before recovering to 17.21% in 2023. This indicates fluctuations in the company's ability to generate profits before tax expenses.
The net profit margin, which measures the company's profitability after all expenses, including taxes, has also shown variability. Southern Company's net profit margin was highest in 2019 at 22.13% and lowest in 2021 at 10.35%. The ratio rebounded to 15.74% in 2023, reflecting the company's ability to manage its expenses and generate profits for its shareholders.
Overall, Southern Company's profitability ratios demonstrate a mixed performance over the period, with fluctuations in different margins. Monitoring these ratios can provide insights into the company's efficiency in generating profits and managing costs over time.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.18% | 3.98% | 2.90% | 3.97% | 6.52% |
| Return on assets (ROA) | 2.85% | 2.62% | 1.89% | 2.55% | 3.99% |
| Return on total capital | 6.41% | 6.32% | 13.27% | 17.46% | 28.13% |
| Return on equity (ROE) | 12.64% | 11.63% | 8.64% | 11.20% | 17.23% |
The profitability ratios of Southern Company for the past five years show varying trends.
- Operating return on assets (Operating ROA) has remained relatively stable, with a slight decrease from 4.51% in 2019 to 4.13% in 2023. This indicates that the company is generating profits from its core operations at a consistent level.
- Return on assets (ROA) has fluctuated over the years, ranging from 1.88% in 2021 to 3.99% in 2019. The decrease in 2021 followed by an increase in 2019 suggests some level of volatility in the company's overall profitability efficiency.
- Return on total capital has also shown some variability, though the difference is not as pronounced as in ROA. The ratio has ranged from 6.32% in 2023 to 7.40% in 2019, indicating that the company continues to generate returns on the total capital invested in the business.
- Return on equity (ROE) has followed a similar pattern as ROA, dipping to 8.50% in 2021 and increasing to 17.05% in 2019. This metric reflects the return earned by the company on the shareholders' equity and shows some level of inconsistency in performance over the years.
Overall, Southern Company has demonstrated operational efficiency in generating profits, but there are fluctuations in the overall profitability ratios over the years. This could be influenced by various factors such as changes in revenue, expenses, or investments made by the company during the period under consideration.