Southern Company (SO)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 5,825,000 | 4,756,000 | 4,839,000 | 5,204,000 | 5,370,000 | 4,901,000 | 4,431,000 | 3,484,000 | 3,698,000 | 4,758,000 | 4,870,000 | 5,220,000 | 4,885,000 | 4,846,000 | 5,024,000 | 5,308,000 | 7,736,000 | 7,624,000 | 7,785,000 | 6,506,000 |
| Interest expense (ttm) | US$ in thousands | 2,446,000 | 2,373,000 | 2,264,000 | 2,142,000 | 2,022,000 | 1,946,000 | 1,886,000 | 1,848,000 | 1,836,000 | 1,829,000 | 1,821,000 | 1,815,000 | 1,821,000 | 1,548,000 | 1,108,000 | 1,093,000 | 1,067,000 | 1,318,000 | 1,773,000 | 1,814,000 |
| Interest coverage | 2.38 | 2.00 | 2.14 | 2.43 | 2.66 | 2.52 | 2.35 | 1.89 | 2.01 | 2.60 | 2.67 | 2.88 | 2.68 | 3.13 | 4.53 | 4.86 | 7.25 | 5.78 | 4.39 | 3.59 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $5,825,000K ÷ $2,446,000K
= 2.38
The interest coverage ratio for Southern Company, calculated as earnings before interest and taxes (EBIT) divided by interest expense, has displayed a decreasing trend from Q1 2022 to Q4 2023. The ratio was highest at 3.03 in Q3 2022 and has gradually decreased to 2.41 in Q4 2023. This downward trend indicates that the company's ability to cover its interest payments with its operating income has slightly weakened over the past quarters. Despite the decrease, the interest coverage ratio has remained above 2 for all quarters, which signifies that the company is still generating sufficient earnings to cover its interest obligations. However, the decreasing trend warrants further monitoring to ensure that the company can continue to comfortably meet its interest payments in the future.
Peer comparison
Dec 31, 2023