Analysis of financial strategy and capital structure of Southern Company
Fanqi Sun
Co-Presenters: Individual Presentation
College: College of Business and Public Management
Major: Finance
Faculty Research Mentor: Huaibing Yu
Abstract:
Southern Company is one of the largest energy suppliers in the United States, with a prominent position in regional energy markets and a complex financial structure that balances significant capital investments, project development, and shareholder returns. This study will analyze Southern's capital structure, investment decisions, and financial strategy, assessing how the company manages financing in a capital-intensive industry.The report will begin with an overview of Southern Company's business model, operational capabilities, profitability, and key financial indicators. The company's debt-to-equity ratio, cost of capital, stock price movements, and dividend policy are then analyzed to assess their impact on financial health and long-term sustainability. In addition, the study will explore how Southern companies allocate capital across traditional fossil fuel, nuclear, and renewable energy projects, achieving trade-offs. The focus will be on risk management strategies, including how companies respond to energy price volatility, regulatory changes, and macroeconomic conditions. By comparing Southern Company's financial investment strategy to that of its competitors in the utility sector, the project aims to gain insight into the economic decision-making process in the industry.The results of this study will help to understand how large energy companies manage corporate financial policies to ensure profitability, low financial risk, and long-term shareholder value.