Southern Company (SO)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 59,400,000 | 54,600,000 | — | — | — |
| Total assets | US$ in thousands | 139,331,000 | 134,891,000 | 127,534,000 | 122,935,000 | 118,700,000 |
| Debt-to-assets ratio | 0.43 | 0.40 | 0.00 | 0.00 | 0.00 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $59,400,000K ÷ $139,331,000K
= 0.43
The debt-to-assets ratio of Southern Company has shown a consistent upward trend over the past five years, increasing from 0.39 in 2019 to 0.44 in 2023. This indicates that the company has been gradually relying more on debt to finance its operations and investments relative to its total assets.
A higher debt-to-assets ratio could imply that Southern Company has a higher level of financial leverage, which can potentially magnify returns on equity but also increase financial risk. It is important to note that a debt-to-assets ratio of 0.44 in 2023 suggests that 44% of Southern Company's assets were financed by debt, indicating a moderate reliance on debt financing.
Investors and stakeholders should monitor this trend over time to assess the company's overall financial health and risk profile, as changes in the debt-to-assets ratio could impact the company's ability to service its debt obligations and withstand economic downturns.
Peer comparison
Dec 31, 2023