Freeport-McMoran Copper & Gold Inc (FCX)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 1,889,000 | 1,842,000 | 3,468,000 | 4,306,000 | 853,000 |
| Total stockholders’ equity | US$ in thousands | 17,581,000 | 16,693,000 | 15,555,000 | 13,980,000 | 10,174,000 |
| ROE | 10.74% | 11.03% | 22.30% | 30.80% | 8.38% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $1,889,000K ÷ $17,581,000K
= 10.74%
Freeport-McMoran Copper & Gold Inc's return on equity (ROE) has exhibited fluctuating trends over the past five years. The ROE was 8.38% as of December 31, 2020, indicating a relatively modest return compared to the company's equity base.
However, there was a substantial improvement in ROE to 30.80% by December 31, 2021, suggesting a significant increase in profitability relative to shareholders' equity. This sharp increase in ROE could be attributed to improved operational efficiency, increased profitability, or better utilization of assets.
In the subsequent years, the ROE continued to remain at relatively elevated levels, although with some decline. By December 31, 2022, the ROE stood at 22.30%, indicating a slight decrease from the previous year but still reflecting healthy returns to shareholders.
The company experienced a more notable drop in ROE by December 31, 2023, where the ratio fell to 11.03%. This decrease could be attributed to various factors such as increased expenses, lower revenue, or changes in the capital structure that impacted the return generated from the equity.
As of December 31, 2024, the ROE further decreased to 10.74%, indicating ongoing challenges in maintaining profitability relative to the level of equity invested in the company. This decline in ROE could raise concerns among investors regarding the company's ability to generate returns on their investment.
Overall, Freeport-McMoran Copper & Gold Inc's ROE has shown variability over the years, with fluctuations in profitability and efficiency impacting the returns generated for shareholders. It is essential for the company to address the factors influencing ROE to sustain and enhance shareholder value in the future.
Peer comparison
Dec 31, 2024