Spire Inc (SR)

Short-term

Turnover ratios

Based on the provided activity ratios for Spire Inc., we can evaluate the efficiency of the company's operations and management of working capital. The inventory turnover, which measures how efficiently the company is managing its inventory, has increased significantly from 2.19 in 2022 to 4.51 in 2023, indicating that the company is selling its inventory at a faster rate. Similarly, the receivables turnover has also improved, indicating that the company is collecting its receivables more efficiently.

The payables turnover ratio has increased from 1.50 in 2022 to 4.98 in 2023. This suggests that Spire Inc. is taking longer to pay its suppliers, which could indicate improved cash management or potentially strained supplier relationships.

Notably, the working capital turnover is not available for analysis, which makes it challenging to assess the company's effectiveness in using its working capital to generate sales. It is important to recognize that this ratio is instrumental in measuring how efficiently the company uses its working capital to generate revenue.

In conclusion, while there have been positive improvements in inventory turnover, receivables turnover, and payables turnover, the absence of working capital turnover data limits the comprehensive assessment of Spire Inc.'s efficiency in utilizing its working capital for generating sales.

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Average number of days

Spire Inc.'s activity ratios provide insight into its management of inventory, receivables, and payables. The days of inventory on hand (DOH) decreased significantly from 166.84 days in 2022 to 80.91 days in 2023, indicating a more efficient management of inventory. This suggests that Spire Inc. is selling its products more quickly or managing inventory levels more effectively.

The days of sales outstanding (DSO) also improved, declining from 106.92 days in 2022 to 42.51 days in 2023. This indicates a more efficient collection of receivables, potentially improving cash flows and reducing the risk of bad debts.

Additionally, the number of days of payables decreased from 243.91 days in 2022 to 73.27 days in 2023, showing that Spire Inc. is paying its suppliers more promptly. This could improve its relationship with suppliers and enhance its working capital management.

Overall, these improvements in activity ratios suggest that Spire Inc. has enhanced its operational efficiency and is effectively managing its working capital. However, it is important to note that the lack of data for 2020 and 2019 makes it difficult to assess the trends over a longer time horizon.

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Long-term

The long-term activity ratios of Spire Inc. reveal the efficiency of the company's utilization of its fixed assets and total assets over the past five years.

The fixed asset turnover, which measures the ability of the company to generate sales from its fixed assets, has shown an increasing trend from 0.36 in 2020 to 0.42 in 2023. This indicates that Spire Inc. has been able to generate more sales from its fixed assets over the years, reflecting improved efficiency in asset utilization.

Similarly, the total asset turnover, which reflects the company's ability to generate sales from all assets, has also exhibited an increasing trend from 0.23 in 2020 to 0.26 in 2023. This suggests that Spire Inc. has been able to generate more sales from its total assets, showcasing improved efficiency in overall asset utilization.

The increasing trend in both the fixed asset turnover and total asset turnover ratios indicates that Spire Inc. has been effectively leveraging its assets to generate sales, reflecting improved operational efficiency and potentially better financial performance.