Spire Inc (SR)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 88.47% | 87.26% | 98.32% | -15.82% | -6.74% |
| Operating profit margin | 16.87% | 19.64% | 21.15% | 11.79% | 16.36% |
| Pretax margin | 10.33% | 13.46% | 15.98% | 5.77% | 11.86% |
| Net profit margin | 8.77% | 10.62% | 12.76% | 5.06% | 9.99% |
Profitability ratios provide insights into a company's ability to generate earnings from its operations and are crucial for assessing its financial health. Let's analyze Spire Inc.'s profitability ratios for the past five years.
Gross profit margin: This ratio represents the percentage of revenue retained after accounting for the cost of goods sold. Spire Inc.'s gross profit margin has shown a declining trend, dropping from 57.98% in 2022 to 52.71% in 2023. This may indicate increased costs or pricing pressure on its products or services, which could impact overall profitability.
Operating profit margin: This ratio measures the company's ability to generate operating income from its sales. Spire Inc.'s operating profit margin has also experienced a downward trend, declining from 18.57% in 2022 to 15.70% in 2023. This suggests that the company's operating expenses may have risen relative to its sales, potentially impacting its operating efficiency.
Pretax margin: The pretax margin reflects the percentage of earnings relative to total revenue before accounting for taxes. Spire Inc.'s pretax margin has fluctuated over the years, dropping from 12.72% in 2022 to 9.61% in 2023. This indicates that the company's pre-tax profitability has decreased, which could be a result of higher expenses or lower revenue growth.
Net profit margin: The net profit margin indicates the company's ability to generate profits after all expenses, including taxes and interest. Spire Inc.'s net profit margin has shown a declining trend, falling from 9.36% in 2022 to 7.59% in 2023. This suggests that the company's bottom-line profitability has been impacted, potentially due to rising costs or other financial burdens.
Overall, the declining trend in Spire Inc.'s profitability ratios raises concerns about its ability to efficiently convert sales into profits. It is essential for the company to assess its cost structures, revenue streams, and operational efficiencies to reverse this trend and improve its overall profitability.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.06% | 4.05% | 4.81% | 2.50% | 3.97% |
| Return on assets (ROA) | 2.11% | 2.19% | 2.90% | 1.08% | 2.42% |
| Return on total capital | 6.83% | 6.92% | 7.98% | 4.18% | 6.99% |
| Return on equity (ROE) | 7.46% | 7.83% | 10.22% | 3.51% | 7.26% |
Spire Inc. is a company that operates in the energy sector. To assess its profitability, we can analyze several key financial ratios over the past five years.
1. Operating return on assets (Operating ROA):
This ratio measures the company's operating income generated per dollar of assets. Spire Inc.'s operating ROA has been relatively stable over the past five years, ranging from 3.97% in 2019 to 4.81% in 2021. In 2023, the operating ROA was 4.06%, indicating that the company generated approximately 4.06 cents of operating income for every dollar of assets.
2. Return on assets (ROA):
ROA measures the company's overall profitability by indicating how efficiently it utilizes its assets to generate profits. Spire Inc.'s ROA has fluctuated over the five-year period, with a significant decrease to 0.89% in 2020 and a subsequent increase to 2.74% in 2021. In 2023, the ROA stood at 1.96%, suggesting that the company generated approximately 1.96 cents of net income for every dollar of assets.
3. Return on total capital:
This ratio indicates the overall return on the company's total invested capital, including equity and debt. Spire Inc.'s return on total capital has generally remained consistent, ranging from 5.51% in 2023 to 7.11% in 2021. The 2023 figure implies that the company generated a return of 5.51% on its total capital during that fiscal year.
4. Return on equity (ROE):
ROE measures a company's ability to generate profits from its shareholders' equity. Spire Inc.'s ROE has shown variability over the past five years, with a significant increase to 9.61% in 2021 followed by a decrease to 6.90% in 2023. The 2023 figure indicates that the company generated a return of 6.90% on its shareholders' equity during that fiscal year.
In summary, Spire Inc.'s profitability ratios reflect a degree of fluctuation over the past five years. While the operating ROA has remained relatively stable, the overall ROA, return on total capital, and ROE have shown varying trends. This analysis provides insight into the company's ability to generate profits relative to its assets, capital structure, and equity.