Freeport-McMoran Copper & Gold Inc (FCX)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 6,588,000 | 6,521,000 | 7,275,000 | 8,261,000 | 2,395,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 17,581,000 | 16,693,000 | 15,555,000 | 13,980,000 | 10,174,000 |
| Return on total capital | 37.47% | 39.06% | 46.77% | 59.09% | 23.54% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $6,588,000K ÷ ($—K + $17,581,000K)
= 37.47%
Freeport-McMoran Copper & Gold Inc's return on total capital has shown a positive trend over the past five years. The return on total capital increased from 23.54% as of December 31, 2020, to 59.09% as of December 31, 2021, indicating a significant improvement in the company's efficiency in generating returns relative to its total capital employed.
However, in the subsequent years, the return on total capital experienced fluctuations, declining to 46.77% as of December 31, 2022, then further decreasing to 39.06% as of December 31, 2023, and finally decreasing to 37.47% as of December 31, 2024.
While the return on total capital remained above the initial level, the declining trend suggests a potential decrease in the efficiency of capital utilization by the company in generating returns.
It may be crucial for Freeport-McMoran Copper & Gold Inc to assess its capital allocation strategies and operational performance to sustain or improve its return on total capital in the future.
Peer comparison
Dec 31, 2024