Freeport-McMoran Copper & Gold Inc (FCX)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 15,695,000 | 15,089,000 | 14,030,000 | 11,655,000 | 13,125,000 |
| Inventory | US$ in thousands | 5,840,000 | 4,925,000 | 4,268,000 | 3,656,000 | 3,829,000 |
| Inventory turnover | 2.69 | 3.06 | 3.29 | 3.19 | 3.43 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $15,695,000K ÷ $5,840,000K
= 2.69
The inventory turnover of Freeport-McMoRan Inc has shown a downward trend over the past five years, declining from 2.83 in 2019 to 2.25 in 2023. This indicates that the company's efficiency in managing its inventory levels and generating sales from its inventory has decreased over time. A lower inventory turnover ratio implies that Freeport-McMoRan is holding onto its inventory for a longer period before selling it, which could potentially lead to higher storage and carrying costs.
It is essential for Freeport-McMoRan to address this declining trend in inventory turnover to improve its overall operational efficiency and profitability. This may involve better inventory management practices, such as optimizing production schedules, enhancing demand forecasting, and streamlining supply chain processes. By improving inventory turnover, Freeport-McMoRan can free up capital tied up in inventory, reduce carrying costs, and potentially increase its profitability in the long run.
Peer comparison
Dec 31, 2023