Freeport-McMoran Copper & Gold Inc (FCX)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 6,225,000 | 7,037,000 | 8,366,000 | 2,437,000 | 1,091,000 |
| Long-term debt | US$ in thousands | 8,656,000 | 9,583,000 | 9,078,000 | 9,677,000 | 9,821,000 |
| Total stockholders’ equity | US$ in thousands | 16,693,000 | 15,555,000 | 13,980,000 | 10,174,000 | 9,298,000 |
| Return on total capital | 24.56% | 27.99% | 36.28% | 12.28% | 5.71% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $6,225,000K ÷ ($8,656,000K + $16,693,000K)
= 24.56%
Freeport-McMoRan Inc's return on total capital has exhibited fluctuations over the past five years. The return on total capital was 23.89% in 2023, lower than the prior year's 27.00%, reflecting a decrease in the company's ability to generate returns on its total invested capital. However, when compared to 2021 and 2020, where the returns were 35.39% and 9.94% respectively, the 2023 performance falls in between these two extremes.
It is notable that Freeport-McMoRan Inc achieved a significant improvement in return on total capital from 2019 to 2021, almost doubling the rate from 3.59% to 35.39%. This surge in performance demonstrates the company's enhanced efficiency in utilizing its total capital to generate profits during this period.
Overall, while the 2023 return on total capital decreased compared to the previous year, the company has shown improved returns in recent years, indicating a positive trend in capital utilization efficiency.
Peer comparison
Dec 31, 2023