Freeport-McMoran Copper & Gold Inc (FCX)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	2.69	2.74	2.81	2.74	3.06	3.23	3.26	3.41	3.29	3.45	3.16	2.99	3.19	3.26	3.37	3.52	3.43	3.10	3.28	3.23
Receivables turnover	13.69	17.74	20.04	12.81	12.66	17.45	17.19	12.42	13.06	13.91	11.29	9.18	10.02	10.03	9.48	12.12	12.32	14.26	16.42	14.74
Payables turnover	6.36	—	—	—	5.59	—	—	—	6.89	—	—	—	7.91	—	—	—	7.93	—	—	—
Working capital turnover	2.77	2.46	2.36	2.28	2.46	2.47	2.37	2.78	2.56	2.56	2.68	2.60	2.41	2.74	3.04	3.18	3.06	2.85	2.93	3.03

Activity ratios provide insight into how efficiently a company is managing its assets and operations. Let's analyze the activity ratios of Freeport-McMoRan Inc based on the given data:

1. Inventory Turnover:
- Freeport-McMoRan Inc's inventory turnover has been relatively consistent over the past eight quarters, ranging from 2.25 to 2.78.
- This indicates that the company is effectively managing its inventory levels, with a moderate rate of turnover. A higher turnover rate would suggest more efficient management.

2. Receivables Turnover:
- The receivables turnover for Freeport-McMoRan Inc has varied significantly, with Q2 2023 showing the highest turnover of 20.04 and Q1 2023 the lowest at 12.81.
- The company appears to be collecting its receivables more efficiently in some quarters compared to others, which is crucial for maintaining healthy cash flow.

3. Payables Turnover:
- Data for payables turnover is lacking for most quarters, except for Q4 2022 with a turnover of 4.83.
- A higher payables turnover implies that the company is paying its suppliers more quickly, potentially benefiting from early payment discounts.

4. Working Capital Turnover:
- Freeport-McMoRan Inc's working capital turnover has shown marginal fluctuations, with values ranging from 2.28 to 2.78 over the observed quarters.
- A stable working capital turnover indicates that the company is efficiently utilizing its working capital to generate revenue.

In summary, Freeport-McMoRan Inc demonstrates decent efficiency in managing its inventory, receivables, and working capital. However, the lack of consistent data for payables turnover limits a comprehensive analysis of the company's overall activity ratios.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	135.81	133.16	130.08	133.39	119.13	112.94	112.10	107.00	111.03	105.74	115.43	122.14	114.50	111.84	108.46	103.83	106.52	117.80	111.29	113.06
Days of sales outstanding (DSO)	days	26.67	20.57	18.21	28.50	28.84	20.92	21.24	29.40	27.94	26.23	32.33	39.76	36.43	36.38	38.52	30.11	29.63	25.60	22.23	24.77
Number of days of payables	days	57.35	—	—	—	65.34	—	—	—	52.94	—	—	—	46.13	—	—	—	46.01	—	—	—

The activity ratios of Freeport-McMoRan Inc over the past eight quarters reveal some noteworthy trends.

Days of Inventory on Hand (DOH) have shown a gradual increase from Q1 2022 to Q4 2023, indicating that the company is holding onto inventory for a longer period. This may be a cause for concern as excessive inventory levels could tie up resources and potentially lead to obsolete stock.

Days of Sales Outstanding (DSO) have fluctuated over the quarters but generally show a decreasing trend from Q4 2022 to Q2 2023, suggesting that the company is collecting its receivables more efficiently. However, DSO increased in Q3 and Q4 2023 which could indicate potential issues with customer credit or collections.

The Number of Days of Payables has not been consistently reported, making it difficult to assess the company's payment cycle efficiency. However, comparing Q4 2022 and Q4 2023 data shows a decrease in the number of days of payables, which could indicate the company is paying its suppliers more quickly.

Overall, Freeport-McMoRan Inc's activity ratios suggest a need for closer monitoring of inventory levels and further investigation into receivables and payables management to improve working capital efficiency and overall liquidity position.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	0.65	0.66	0.65	0.65	0.70	0.73	0.78	0.80	0.75	0.70	0.63	0.55	0.48	0.46	0.43	0.45	0.49	0.48	0.55	0.62
Total asset turnover	0.44	0.44	0.43	0.42	0.45	0.46	0.48	0.50	0.48	0.45	0.42	0.37	0.34	0.33	0.32	0.33	0.35	0.35	0.39	0.43

Freeport-McMoRan Inc's long-term activity ratios, namely fixed asset turnover and total asset turnover, provide insight into the efficiency of the company in utilizing its assets to generate revenue over an extended period.

- Fixed asset turnover: This ratio measures how effectively the company is using its fixed assets to generate sales. The declining trend in the fixed asset turnover ratio from 0.80 in Q1 2022 to 0.65 in Q4 2023 indicates that Freeport-McMoRan Inc may be experiencing challenges in maximizing the productivity of its fixed assets. A lower ratio suggests that the company is generating less revenue relative to its investment in fixed assets.

- Total asset turnover: This ratio evaluates the company's ability to generate sales from all its assets, including both fixed and current assets. The decreasing trend in the total asset turnover ratio, from 0.50 in Q1 2022 to 0.44 in Q4 2023, suggests that Freeport-McMoRan Inc's overall asset utilization efficiency has been declining. A declining total asset turnover ratio indicates that the company may be struggling to efficiently generate sales from its total asset base.

Overall, the decreasing trends in both fixed asset turnover and total asset turnover ratios for Freeport-McMoRan Inc over the periods analyzed indicate a potential inefficiency in asset utilization. This could imply that the company may need to reassess its asset management strategies to enhance operational efficiency and improve revenue generation from its asset base.