Spire Inc (SR)

Short-term

Turnover ratios

The inventory turnover ratio for Spire Inc has fluctuated over the past five years, ranging from 0.12 to 1.17. This indicates that the company's ability to sell its inventory has varied, with a significant improvement from 2021 to 2022. A higher inventory turnover ratio suggests more efficient management of inventory.

The receivables turnover ratio has also shown fluctuations, with values between 6.71 and 14.97 over the same period. This ratio indicates how quickly the company collects its accounts receivable. A higher ratio suggests a faster collection process, which is generally favorable for cash flow management.

In terms of payables turnover, Spire Inc's performance has also varied, with values ranging from 0.09 to 1.30. This measure reflects the speed at which the company pays its suppliers. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly.

Unfortunately, data for the working capital turnover ratio is not provided, making it impossible to assess how effectively Spire Inc is using its working capital to support its day-to-day operations.

Overall, the analysis of Spire Inc's activity ratios suggests that the company has experienced fluctuations in its inventory management, accounts receivable collection, and accounts payable practices over the past five years. These ratios provide insights into the efficiency of the company's operations and its management of key components of its working capital.

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Average number of days

The activity ratios of Spire Inc, focusing on inventory management, accounts receivable collection, and accounts payable turnover, reflect varying efficiency levels over the past five years.

1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates fluctuating inventory management efficiency:
- The company's inventory turnover improved from 2021 to 2022 but then deteriorated in 2023 before showing a significant improvement in 2024.
- Lower DOH values suggest faster inventory turnover and better management of stock levels, which can lead to lower holding costs and potential for increased liquidity.

2. Days of Sales Outstanding (DSO):
- The DSO trend highlights the company's accounts receivable collection efficiency:
- A decrease in DSO from 2021 to 2020 and then again in 2024 indicates improved collection practices and quicker conversion of sales into cash.
- A lower DSO indicates that the company is able to collect outstanding payments more quickly, which can enhance cash flow and working capital management.

3. Number of Days of Payables:
- The number of days of payables trend shows the efficiency of managing trade credit and payment terms:
- A significant decrease in the number of days of payables from 2021 to 2020 and then again in 2024 implies a more aggressive payment approach and potentially improved supplier relationships.
- A lower number of days of payables may indicate a faster turnover of payables and effective management of cash outflows.

Overall, analyzing these activity ratios provides insights into how effectively Spire Inc manages its inventory, accounts receivable, and accounts payable. The trends observed can help assess the company's operational efficiency, working capital management, and potential impacts on liquidity and cash flow.

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Long-term

The long-term activity ratios for Spire Inc over the past five years indicate the efficiency of the company in utilizing its assets to generate sales revenue.

1. Fixed Asset Turnover:
- Spire Inc's fixed asset turnover has shown a declining trend from 4.52 in 2021 to 2.71 in 2024.
- This decline suggests that the company has become less effective in generating sales from its fixed assets over the years.
- Despite the decrease, the current fixed asset turnover of 2.71 in 2024 still indicates that for every dollar invested in fixed assets, the company generates $2.71 in revenue, though this is lower compared to previous years.

2. Total Asset Turnover:
- The total asset turnover ratio has remained relatively stable around 0.21 to 0.24 over the five-year period.
- This ratio indicates that for each dollar of total assets, Spire Inc generates between $0.21 to $0.24 in revenue annually.
- A low total asset turnover ratio can suggest that the company may have excessive assets relative to its sales volume, which could indicate inefficiency in asset utilization.

In conclusion, while the fixed asset turnover ratio has exhibited a decreasing trend, the total asset turnover ratio has been fairly consistent over the years. Spire Inc may need to focus on improving the efficiency of utilizing its fixed assets to generate sales revenue in order to enhance its overall performance in the long term.