Spire Inc (SR)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	311.73	356.58	582.10	3,118.35	407.80
Days of sales outstanding (DSO)	days	24.90	26.77	35.15	54.40	24.38
Number of days of payables	days	280.19	322.90	851.02	4,190.85	518.11
Cash conversion cycle	days	56.44	60.45	-233.77	-1,018.11	-85.93

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 311.73 + 24.90 – 280.19
= 56.44

The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. In the case of Spire Inc, the cash conversion cycle has shown varying trends over the past five years.

In 2024, the cash conversion cycle stands at 56.44 days, indicating that on average it takes Spire Inc approximately 56 days to convert its investments in inventory and other resources into cash inflows from sales. This suggests a relatively efficient cycle compared to the previous year.

In 2023, the cash conversion cycle was slightly longer at 60.45 days, signaling a slight decrease in efficiency compared to 2024. However, it is worth noting that the company has been able to manage its working capital effectively during this period.

In 2022, the cash conversion cycle was negative at -233.77 days, indicating that the company was able to convert its investments into cash at a much faster rate compared to the previous years. This could be attributed to efficient management of inventory and receivables, resulting in a negative cycle.

In 2021, the cash conversion cycle was significantly negative at -1,018.11 days, suggesting an extremely fast conversion of investments into cash inflows. This could indicate an exceptional performance in managing working capital and generating cash from operations.

In 2020, the cash conversion cycle was negative at -85.93 days, showing a faster conversion of investments into cash compared to the previous year.

Overall, the trend in the cash conversion cycle for Spire Inc has shown variability over the past five years, with fluctuations in efficiency in managing working capital and converting investments into cash inflows. It is essential for the company to continue monitoring and optimizing its cash conversion cycle to ensure effective working capital management and sustainable operations.