Freeport-McMoran Copper & Gold Inc (FCX)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 6,225,000 | 6,033,000 | 5,503,000 | 5,829,000 | 7,037,000 | 7,812,000 | 9,312,000 | 9,643,000 | 8,366,000 | 7,770,000 | 6,188,000 | 4,442,000 | 2,437,000 | 1,503,000 | 585,000 | 297,000 | 1,091,000 | 632,000 | 1,985,000 | 3,616,000 |
| Interest expense (ttm) | US$ in thousands | 782,000 | 743,000 | 760,000 | 715,000 | 661,000 | 695,000 | 670,000 | 646,000 | 653,000 | 718,000 | 721,000 | 715,000 | 726,000 | 709,000 | 712,000 | 720,000 | 727,000 | 1,017,000 | 1,020,000 | 1,018,000 |
| Interest coverage | 7.96 | 8.12 | 7.24 | 8.15 | 10.65 | 11.24 | 13.90 | 14.93 | 12.81 | 10.82 | 8.58 | 6.21 | 3.36 | 2.12 | 0.82 | 0.41 | 1.50 | 0.62 | 1.95 | 3.55 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $6,225,000K ÷ $782,000K
= 7.96
The interest coverage ratio measures a company's ability to pay interest on its outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations.
Analyzing Freeport-McMoRan Inc's interest coverage over the past eight quarters, we observe some fluctuations. The Q2 2022 and Q1 2022 ratios were the highest at 15.64 and 16.41, respectively, suggesting a strong ability to cover interest payments during those periods. However, the ratios have decreased since then, with Q4 2023 showing a ratio of 12.12, the lowest in the series.
Although the Q4 2023 interest coverage ratio of 12.12 is lower than the previous quarters, it still indicates that Freeport-McMoRan Inc has sufficient earnings to cover its interest expenses by over 12 times. This demonstrates a relatively healthy financial position despite the slight decline in coverage ratios since the peak in Q2 and Q1 2022.
Overall, it is important for Freeport-McMoRan Inc to continue monitoring its interest coverage ratio to ensure it maintains a strong ability to meet its interest obligations and manage its debt effectively.
Peer comparison
Dec 31, 2023
See also:
Freeport-McMoran Copper & Gold Inc Interest Coverage (Quarterly Data)