Financial statement analysis and common stock valuation

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Freeport-McMoRan Inc. common stock issue as the present value of all future dividends.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• Dividend Growth Rate (g)

Analysis of Profitability Ratios

Measures the income of Freeport-McMoRan Inc. relative to its revenues and invested capital.

• Profitability Ratios (Summary)
• Gross Profit Margin
• Operating Profit Margin
• Net Profit Margin
• Return on Equity (ROE)
• Return on Assets (ROA)

Common-Size Balance Sheet: Assets
Quarterly Data

Assets components shown as percentage of total assets.

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

An approach to decomposing Freeport-McMoRan Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin

Balance Sheet: Assets

The assets reports major classes and amounts of resources owned or controlled by Freeport-McMoRan Inc..

Balance Sheet: Liabilities and Stockholders’ Equity

The liabilities and stockholders’ equity reports major classes and amounts of external claims on assets and owners’ capital contributions, and other internally generated sources of capital.

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Freeport-McMoRan Inc. during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Analysis of Liquidity Ratios

Measures the adequacy of Freeport-McMoRan Inc. cash resources to meet its near-term cash obligations.

• Liquidity Ratios (Summary)
• Current Ratio
• Quick Ratio
• Cash Ratio

Present Value of Free Cash Flow to Equity (FCFE)

The FCFE valuation approach estimates the value of equity as the present value of future FCFE discounted at the required rate of return on equity.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• FCFE Growth Rate (g)

Analysis of Reportable Segments

Freeport-McMoRan Inc. operates in 5 segments: Morenci; Cerro Verde; Indonesia Operations; U.S. Rod & Refining; and Atlantic Copper.

• Segment Profit Margin
• Segment Return on Assets (Segment ROA)
• Segment Asset Turnover
• Segment Capital Expenditures to Depreciation
• Revenues
• DD&A
• Operating income (loss)
• Assets
• Capital expenditures

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to Freeport-McMoRan Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to Equity (FCFE)
• P to FCFE Ratio, Current
• P to FCFE Ratio, Historical

Analysis of Revenues

• Revenues as Reported