Southern Company (SO)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 139,331,000 | 138,321,000 | 137,116,000 | 134,756,000 | 134,891,000 | 134,005,000 | 130,769,000 | 128,639,000 | 127,534,000 | 127,861,000 | 125,907,000 | 125,393,000 | 122,935,000 | 123,158,000 | 119,731,000 | 118,852,000 | 118,700,000 | 117,591,000 | 114,867,000 | 114,096,000 |
| Total stockholders’ equity | US$ in thousands | 31,444,000 | 35,304,000 | 34,648,000 | 34,562,000 | 30,408,000 | 35,718,000 | 33,255,000 | 32,920,000 | 27,874,000 | 33,510,000 | 33,037,000 | 33,359,000 | 27,972,000 | 32,791,000 | 32,252,000 | 32,207,000 | 27,505,000 | 32,082,000 | 31,422,000 | 30,978,000 |
| Financial leverage ratio | 4.43 | 3.92 | 3.96 | 3.90 | 4.44 | 3.75 | 3.93 | 3.91 | 4.58 | 3.82 | 3.81 | 3.76 | 4.39 | 3.76 | 3.71 | 3.69 | 4.32 | 3.67 | 3.66 | 3.68 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $139,331,000K ÷ $31,444,000K
= 4.43
The financial leverage ratio of Southern Company, based on the data provided, demonstrates some fluctuations over the past eight quarters. The ratio has ranged from a low of 4.29 in Q3 2022 to a high of 4.55 in Q2 2022 and Q1 2022. This indicates that the company has maintained a relatively high level of financial leverage over this period, with an average ratio of approximately 4.44.
A financial leverage ratio of 4.44 implies that, on average, Southern Company's assets are financed through a mixture of equity and debt in a ratio of approximately 4.44 to 1. This suggests that the company relies more on debt financing to support its operations and investments compared to equity financing.
It is important to note that changes in the financial leverage ratio can impact the company's financial risk and profitability. A higher ratio indicates higher financial risk due to increased debt obligations, which may lead to higher interest expenses and reduced financial flexibility. On the other hand, a higher leverage ratio can also amplify returns for shareholders in favorable market conditions.
Overall, Southern Company's financial leverage ratio has shown some variability over the past eight quarters, reflecting the company's financing decisions and risk management strategies. Further analysis of the company's capital structure and debt management policies may provide additional insights into its financial health and performance.
Peer comparison
Dec 31, 2023