Spire Inc (SR)

Financial leverage ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Total assets	US$ in thousands	10,313,600	10,083,700	9,356,400	8,241,200	7,619,200
Total stockholders’ equity	US$ in thousands	2,917,300	2,818,500	2,658,200	2,522,300	2,543,000
Financial leverage ratio		3.54	3.58	3.52	3.27	3.00

September 30, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,313,600K ÷ $2,917,300K
= 3.54

The financial leverage ratio of Spire Inc. has shown a fluctuating trend over the past five years. It increased from 3.00 in 2019 to 3.27 in 2020, indicating a potential increase in the company's financial leverage. Subsequently, the ratio continued to rise to 3.51 in 2021 before peaking at 3.56 in 2022. However, in 2023, the financial leverage ratio exhibited a slight decrease to 3.52.

This trend suggests that Spire Inc. has been utilizing more debt financing relative to its equity over the years, with the ratio consistently above 3.0. A high financial leverage ratio can indicate a higher risk for the company, as it implies a significant reliance on debt to finance its operations and investments. It also signifies that a large portion of the company's assets are funded by debt, which can lead to increased interest payments and financial vulnerability in times of economic downturns.

In conclusion, the trend in Spire Inc.'s financial leverage ratio reflects a continuous reliance on debt financing, necessitating careful monitoring of the company's debt management and financial risk in the future.