Spire Inc (SR)

Quick ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cash	US$ in thousands	5,600	6,500	4,300	4,100	5,800
Short-term investments	US$ in thousands	—	87,800	—	—	—
Receivables	US$ in thousands	181,900	200,200	317,300	116,900	121,100
Total current liabilities	US$ in thousands	1,755,400	2,353,600	1,608,300	1,449,200	1,468,800
Quick ratio		0.11	0.13	0.20	0.08	0.09

September 30, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($5,600K + $—K + $181,900K) ÷ $1,755,400K
= 0.11

The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio of 1 or higher is generally considered healthy as it indicates that a company can fully cover its short-term liabilities without relying on inventory sales.

Looking at the quick ratio of Spire Inc. over the past five years, we can observe some fluctuations in the ratio. The quick ratio decreased from 0.50 in 2022 to 0.45 in 2023, indicating a decrease in the company's ability to meet its short-term obligations using its most liquid assets. However, it's important to note that the quick ratio of 0.45 is still above 0.28, which was the quick ratio in 2020 and 2019. This suggests that the company's liquidity position has improved since 2019 and 2020.

A quick ratio of 0.45 implies that for every dollar of current liabilities, Spire Inc. has $0.45 of highly liquid assets available to cover those obligations. While the quick ratio of 0.45 may be considered low, it also depends on the industry standards and the company's specific circumstances. It is important to look at the trend over time and compare it to industry benchmarks to fully evaluate the company's liquidity position.

Overall, the decreasing trend in the quick ratio of Spire Inc. from 2022 to 2023 raises some concerns about the company's ability to cover its short-term obligations with its most liquid assets. Analysts and investors should continue to monitor the trend and investigate the reasons behind the fluctuations in the quick ratio to assess the company's liquidity risk.