Southern Company (SO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 76.89% | 46.36% | 36.96% | 43.53% | 48.57% |
| Operating profit margin | 26.45% | 23.07% | 18.34% | 16.00% | 23.98% |
| Pretax margin | 19.57% | 17.21% | 14.42% | 11.15% | 17.16% |
| Net profit margin | 16.47% | 15.74% | 12.07% | 10.42% | 15.38% |
The gross profit margin for Southern Company exhibited a declining trend from 48.57% in December 2020 to 36.96% in December 2022, but saw a significant improvement to 76.89% by December 2024. This indicates potential fluctuations in the company's ability to generate profits after accounting for the cost of goods sold.
The operating profit margin also experienced some fluctuations, starting at 23.98% in December 2020, dropping to 16.00% in December 2021, and then gradually increasing to 26.45% by December 2024. This suggests variability in the company's operational efficiency and ability to control operating expenses.
The pretax margin for Southern Company showed a similar pattern, with a decrease from 17.16% in December 2020 to 11.15% in December 2021, followed by an upward trend to 19.57% by December 2024. This indicates fluctuations in the company's profitability before accounting for taxes, reflecting changes in revenue and expenses.
Finally, the net profit margin, which represents the company's bottom-line profitability, declined from 15.38% in December 2020 to 10.42% in December 2021, but then improved to 16.47% by December 2024. This metric highlights changes in Southern Company's profitability after all expenses and taxes have been accounted for.
Overall, the profitability ratios of Southern Company demonstrate some variability over the years, with fluctuations in gross profit, operating profit, pretax profit, and net profit margins. These trends suggest changes in the company's revenue generation, cost management, and overall financial performance during the period analyzed.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.87% | 4.18% | 3.98% | 2.90% | 3.97% |
| Return on assets (ROA) | 3.03% | 2.85% | 2.62% | 1.89% | 2.55% |
| Return on total capital | 24.01% | 21.57% | 19.44% | 15.38% | 18.73% |
| Return on equity (ROE) | 13.25% | 12.64% | 11.63% | 8.55% | 11.09% |
Based on the provided data, Southern Company's profitability ratios indicate fluctuations in its performance over the years.
1. Operating Return on Assets (Operating ROA):
- Southern Company's Operating ROA decreased from 3.97% in 2020 to 2.90% in 2021, but then increased to 3.98% in 2022 and further to 4.18% in 2023. The ratio peaked at 4.87% in 2024. This trend suggests that the company improved its ability to generate operating profits from its assets in recent years.
2. Return on Assets (ROA):
- The Return on Assets ratio also followed a similar pattern, decreasing from 2.55% in 2020 to 1.89% in 2021 before gradually increasing to 3.03% in 2024. This metric reflects the company's overall efficiency in generating profits from its total assets.
3. Return on Total Capital:
- Southern Company's Return on Total Capital showed a consistent increase over the years, starting at 18.73% in 2020 and rising to 24.01% by 2024. This suggests that the company's profitability relative to its total invested capital improved significantly.
4. Return on Equity (ROE):
- The Return on Equity ratio also displayed an upward trend, with Southern Company's ROE increasing from 11.09% in 2020 to 13.25% in 2024. This indicates that the company's ability to generate profits for its shareholders improved over the years.
Overall, Southern Company's profitability ratios demonstrate improvements in operational efficiency and profitability, as reflected in the upward trends observed across most key metrics over the specified period.