Spire Inc (SR)

The solvency ratios of Spire Inc provide insights into the company's ability to meet its long-term financial obligations and the extent of leverage in its capital structure.

The Debt-to-assets ratio remained relatively stable between 2023 and 2024 at around 0.34, indicating that approximately 34% of the company's assets are financed by debt. This suggests a moderate level of leverage and indicates that a significant portion of assets are funded through equity.

The Debt-to-capital ratio also remained fairly consistent over the same period, ranging from 0.49 to 0.55, implying that debt accounts for around 49% to 55% of Spire Inc's total capital structure. This ratio reflects the proportion of debt in relation to the total capital employed by the company.

The Debt-to-equity ratio shows the amount of debt financing relative to equity financing, with higher values indicating higher financial risk. Spire Inc's Debt-to-equity ratio fluctuated between 0.96 and 1.22 over the past five years, with a peak in 2023 and a decline in 2024 to 1.15. This suggests that the company has been relying more on debt financing compared to equity in recent years.

The Financial leverage ratio, which measures the extent of financial leverage within the company, increased from 3.27 in 2020 to 3.54 in 2023 before slightly declining to 3.36 in 2024. This ratio indicates that Spire Inc's financial leverage has been relatively high, signaling that the company has a significant amount of debt relative to its equity.

Overall, the solvency ratios of Spire Inc suggest a moderate level of leverage in its capital structure, with a consistent reliance on debt financing over the years. Monitor the trend in these ratios to assess the company's ability to manage its long-term financial obligations effectively.

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Coverage ratios

Spire Inc's interest coverage ratio has fluctuated over the past five years, with values ranging from 1.96 to 4.19. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations from its operating income.

In 2024, the interest coverage ratio stands at 2.54, showing a moderate ability to cover interest expenses. Comparing this to the ratio of 2.38 in 2023, there has been a slight improvement in the company's ability to cover interest costs. However, the ratio is still lower than the peak seen in 2021 when it was 4.19, indicating that the company's ability to cover interest expenses has decreased since then.

It is worth noting that the interest coverage ratio in 2020 was relatively low at 1.96, signifying a weaker ability to cover interest payments from operating income. The subsequent improvement in this ratio in the following years reflects a positive trend towards better financial health and stability.

Overall, while the recent interest coverage ratio of 2.54 suggests a moderate ability to meet interest obligations, it is essential for Spire Inc to continue monitoring and managing its financial leverage to ensure sustainable operations and profitability.