Southern Company (SO)
Debt-to-equity 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 stockholders’ equity | US$ in thousands | 31,444,000 | 30,408,000 | 27,874,000 | 27,972,000 | 27,505,000 |
| Debt-to-equity ratio | 1.89 | 1.80 | 0.00 | 0.00 | 0.00 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $59,400,000K ÷ $31,444,000K
= 1.89
The debt-to-equity ratio for Southern Company has shown a fluctuating trend over the past five years. The ratio increased from 1.69 in 2019 to 1.74 in 2020, indicating a slight rise in the company's reliance on debt to finance its operations. Subsequently, the ratio continued to increase to 1.91 in 2021 and further to 1.89 in 2022, suggesting a continued increase in debt relative to equity.
However, in 2023, Southern Company's debt-to-equity ratio reached 1.97, the highest level in the five-year period. This indicates a significant increase in the company's debt compared to its equity over the past year. An increase in the debt-to-equity ratio may raise concerns about the company's financial leverage and its ability to meet its debt obligations.
Overall, the trend in the debt-to-equity ratio for Southern Company suggests a growing reliance on debt as a source of financing, which may warrant further monitoring and evaluation of the company's financial health and risk level.
Peer comparison
Dec 31, 2023