Southern Company (SO)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	3,976,000	3,535,000	2,408,000	3,134,000	4,739,000
Total stockholders’ equity	US$ in thousands	31,444,000	30,408,000	27,874,000	27,972,000	27,505,000
ROE		12.64%	11.63%	8.64%	11.20%	17.23%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $3,976,000K ÷ $31,444,000K
= 12.64%

The return on equity (ROE) for Southern Company has fluctuated over the past five years. In 2023, the ROE was 12.64%, showing an increase compared to the prior year. This indicates that for every dollar of shareholders' equity, the company generated a profit of 12.64 cents in 2023.

The ROE was relatively stable in 2022 at 11.59%, slightly lower than in 2021 when it was 8.50%. The significant increase in 2021 may indicate an improvement in the company's profitability or more efficient use of shareholders' equity during that year.

In 2020, the ROE was 11.04%, showing a slight decrease compared to 2019 when it was 17.05%. The sharp decline in ROE from 2019 to 2020 could be a cause for concern unless there was a valid explanation such as a significant investment in assets or changes in capital structure that impacted the profitability metrics.

Overall, Southern Company's ROE has shown variations over the years, suggesting changes in the company's profitability and efficiency in generating returns for shareholders. It is essential for investors and stakeholders to closely monitor these trends to assess the company's performance and future prospects.