Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
Freeport-McMoRan Inc., long-term (investment) activity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net fixed asset turnover
- The net fixed asset turnover ratio increased significantly from 0.48 in 2020 to 0.76 in 2021, indicating improved efficiency in utilizing fixed assets to generate revenue. However, it declined to 0.71 in 2022 and further to 0.66 in 2023, suggesting some deterioration in asset utilization. There was a slight recovery in 2024 to 0.68, although the ratio remained below the 2021 peak.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- This adjusted turnover ratio follows a similar pattern to the net fixed asset turnover, starting at 0.48 in 2020 and rising sharply to 0.75 in 2021. The ratio then gradually declined to 0.7 in 2022, 0.65 in 2023, and modestly increased to 0.66 in 2024. The inclusion of right-of-use assets slightly lowers the turnover but demonstrates comparable trends.
- Total asset turnover
- Total asset turnover showed a notable improvement from 0.34 in 2020 to 0.48 in 2021, signaling more effective use of total assets. After 2021, the ratio decreased somewhat to 0.45 in 2022 and 0.44 in 2023, before a small recovery to 0.46 in 2024. This suggests that asset utilization peaked in 2021 and has stabilized at a moderately lower level since.
- Equity turnover
- Equity turnover increased from 1.4 in 2020 to 1.63 in 2021, indicating improved efficiency in using shareholders' equity to generate sales. Following 2021, the ratio declined to 1.46 in 2022 and continued decreasing to 1.37 in 2023. In 2024, there was a slight rebound to 1.45. Despite fluctuations, the overall trend suggests some reduction in how effectively equity is deployed after a strong performance in 2021.
- General observations
- Across all turnover ratios, 2021 represents a peak in asset and equity utilization efficiency. Subsequent years show a downward trend or stabilization at somewhat lower levels. This pattern may reflect changes in operational conditions, investment strategies, or market factors affecting asset productivity and revenue generation capacity. The partial recoveries in 2024 indicate possible improvements or adjustments aimed at regaining efficiency.
Net Fixed Asset Turnover
Freeport-McMoRan Inc., net fixed asset turnover calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover = Revenues ÷ Property, plant, equipment and mine development costs, net, excluding operating lease right-of-use assets
= ÷ =
- Revenues
- Revenues exhibited a substantial increase from 14,198 million USD in 2020 to 22,845 million USD in 2021, marking a significant growth. Following this jump, revenues remained relatively stable around 22,780 million USD in 2022 and 22,855 million USD in 2023. A notable upturn occurred again in 2024, reaching 25,455 million USD, which represents the highest revenue in the observed period.
- Property, Plant, Equipment and Mine Development Costs (net)
- This asset base showed a continuous upward trajectory over the five-year span. Starting at 29,611 million USD in 2020, it increased steadily to 30,068 million USD in 2021, then accelerated growth to 32,285 million USD in 2022, 34,847 million USD in 2023, and peaked at 37,661 million USD in 2024. This pattern suggests ongoing capital investment or expansion efforts in property, plant, equipment, and mine development.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio experienced an increase from 0.48 in 2020 to 0.76 in 2021, indicating improved efficiency in generating revenues from fixed assets during that period. However, after peaking in 2021, the ratio declined to 0.71 in 2022 and continued to dip to 0.66 in 2023 before a slight recovery to 0.68 in 2024. Despite the recent modest rebound, the ratio remains below the 2021 peak, suggesting a reduction in asset utilization efficiency relative to that year.
- Overall Analysis
- The data reflects a period of strong revenue growth initially, followed by stabilization, and then renewed growth in the latest year. Concurrently, there is a consistent increase in the company’s investment in fixed assets. The trend in net fixed asset turnover ratio implies that while asset base expansion is evident, the efficiency of converting those assets into revenue has fluctuated, peaking early and then declining, with only slight improvement most recently. This may suggest that while capital expenditure continues, the benefits in terms of revenue generation efficiency have not fully materialized or are subject to external factors influencing operational productivity.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Freeport-McMoRan Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property, plant, equipment and mine development costs, net, excluding operating lease right-of-use assets (including operating lease, right-of-use asset)
= ÷ =
- Revenues
- Revenues exhibited a significant increase from 14,198 million US dollars in 2020 to 22,845 million US dollars in 2021, reflecting rapid growth during this period. Subsequently, revenues stabilized around 22,780 to 22,855 million US dollars for 2022 and 2023, respectively, before rising again to 25,455 million US dollars in 2024. This indicates a strong overall upward trend with a temporary plateau in the middle years.
- Property, Plant, Equipment and Mine Development Costs
- The net value of property, plant, equipment, and mine development costs showed consistent growth throughout the period, increasing from 29,818 million US dollars in 2020 to 38,514 million US dollars in 2024. This steady upward trajectory suggests ongoing investment in physical and development assets, with the increment being more pronounced from 2022 onwards.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, which measures the efficiency of asset use in generating revenues, improved markedly from 0.48 in 2020 to 0.75 in 2021. However, it then declined to 0.70 in 2022 and further to 0.65 in 2023, before slightly increasing to 0.66 in 2024. This trend indicates that asset utilization became less efficient after the initial improvement seen in 2021, despite increasing revenues and asset base.
Total Asset Turnover
Freeport-McMoRan Inc., total asset turnover calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Total asset turnover = Revenues ÷ Total assets
= ÷ =
- Revenues
- The revenues demonstrate a significant increase from 2020 through 2024. Starting at $14,198 million in 2020, there was a substantial rise to $22,845 million in 2021, representing a strong growth year. Revenues then stabilized in 2022 and 2023 at approximately $22,780 million and $22,855 million, respectively, showing minimal fluctuation. A notable growth is observed again in 2024, with revenues reaching $25,455 million, indicating positive momentum towards the end of the period.
- Total assets
- Total assets showed a consistent upward trend from 2020 to 2024. Beginning at $42,144 million in 2020, assets increased steadily to $48,022 million in 2021, then to $51,093 million in 2022, followed by $52,506 million in 2023. The growth continued into 2024, reaching $54,848 million. This steady increase suggests ongoing investment or asset accumulation during the analyzed period.
- Total asset turnover
- The total asset turnover ratio, measuring efficiency in using assets to generate revenue, improved significantly in 2021 to 0.48 from 0.34 in 2020. After this peak, the ratio slightly declined to 0.45 in 2022 and then showed marginal decreases in 2023 to 0.44. In 2024, there was a minor recovery to 0.46. Overall, the ratio exhibits a trend of initial improvement in asset utilization, followed by slight declines but remaining higher than the 2020 baseline.
- Summary
- Over the five-year period, the financial data reflect strong revenue growth with an initial sharp increase and further gains towards the end. Total assets consistently rose, indicating expanding asset bases or capital expenditures. Asset turnover peaked in 2021, suggesting enhanced efficiency in asset use during that year, followed by some moderation while still maintaining better performance than at the start of the period. The data collectively suggest that the entity experienced growth alongside optimizing asset utilization, though efficiency gains plateaued after 2021.
Equity Turnover
Freeport-McMoRan Inc., equity turnover calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Equity turnover = Revenues ÷ Stockholders’ equity
= ÷ =
- Revenues
- Revenues show a strong upward trend from 2020 through 2024. Starting at $14,198 million in 2020, the figure rose substantially to $22,845 million in 2021, representing a significant increase. Revenues then remained relatively stable in 2022 and 2023, at approximately $22,780 million and $22,855 million respectively, before experiencing another increase to $25,455 million in 2024. This pattern indicates two phases of rapid revenue growth followed by a period of stabilization and a renewed growth phase at the end of the period analyzed.
- Stockholders’ equity
- Stockholders' equity consistently grew through the period, starting from $10,174 million in 2020 to $17,581 million in 2024. This steady increase reflects accumulation of retained earnings or additional equity infusions over the five years, suggesting strengthening of the company’s financial base and an enhanced capacity to finance operations or absorb losses without jeopardizing solvency.
- Equity turnover
- The equity turnover ratio experienced some fluctuations during the period. It increased from 1.4 in 2020 to a peak of 1.63 in 2021, indicating an improvement in revenue generation relative to equity. However, it declined in the following years to 1.46 in 2022 and further to 1.37 in 2023, before slightly recovering to 1.45 in 2024. This suggests that while the company initially became more efficient at using equity to generate revenues, its efficiency moderated in subsequent years, though it remained above the 2020 level.