Stock Analysis on Net
Stock Analysis on Net

Freeport-McMoRan Inc. (NYSE:FCX)

Analysis of Short-term (Operating) Activity Ratios 

Microsoft Excel

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Short-term Activity Ratios (Summary)

Freeport-McMoRan Inc., short-term (operating) activity ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Turnover Ratios
Inventory turnover 2.59 2.91 3.12 2.99 3.22
Receivables turnover 18.90 17.05 19.56 15.92 19.44
Payables turnover 6.36 5.59 6.89 7.91 7.92
Working capital turnover 2.77 2.46 2.56 2.41 3.06
Average No. Days
Average inventory processing period 141 125 117 122 113
Add: Average receivable collection period 19 21 19 23 19
Operating cycle 160 146 136 145 132
Less: Average payables payment period 57 65 53 46 46
Cash conversion cycle 103 81 83 99 86

Based on: 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), 10-K (reporting date: 2019-12-31).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Freeport-McMoRan Inc. inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Receivables turnover An activity ratio equal to revenue divided by receivables. Freeport-McMoRan Inc. receivables turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Freeport-McMoRan Inc. payables turnover ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Freeport-McMoRan Inc. working capital turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Freeport-McMoRan Inc. number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Freeport-McMoRan Inc. operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Freeport-McMoRan Inc. number of days of payables outstanding increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Freeport-McMoRan Inc. cash conversion cycle improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Inventory Turnover

Freeport-McMoRan Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Cost of sales 15,695 15,089 14,030 11,655 13,105
Inventories 6,060 5,180 4,497 3,893 4,073
Short-term Activity Ratio
Inventory turnover1 2.59 2.91 3.12 2.99 3.22
Benchmarks
Inventory Turnover, Industry
Materials 4.33 4.84 5.27 4.94 5.17

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 15,695 ÷ 6,060 = 2.59

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Freeport-McMoRan Inc. inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Receivables Turnover

Freeport-McMoRan Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Revenues 22,855 22,780 22,845 14,198 14,402
Trade accounts receivable 1,209 1,336 1,168 892 741
Short-term Activity Ratio
Receivables turnover1 18.90 17.05 19.56 15.92 19.44
Benchmarks
Receivables Turnover, Industry
Materials 9.38 9.26 9.18 8.38 8.46

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Receivables turnover = Revenues ÷ Trade accounts receivable
= 22,855 ÷ 1,209 = 18.90

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Freeport-McMoRan Inc. receivables turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.

Payables Turnover

Freeport-McMoRan Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Cost of sales 15,695 15,089 14,030 11,655 13,105
Accounts payable 2,466 2,701 2,035 1,473 1,654
Short-term Activity Ratio
Payables turnover1 6.36 5.59 6.89 7.91 7.92
Benchmarks
Payables Turnover, Industry
Materials 5.83 5.82 5.41 5.49 5.83

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= 15,695 ÷ 2,466 = 6.36

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Freeport-McMoRan Inc. payables turnover ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Working Capital Turnover

Freeport-McMoRan Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Current assets 14,065 15,613 14,830 9,303 7,915
Less: Current liabilities 5,815 6,345 5,892 3,417 3,209
Working capital 8,250 9,268 8,938 5,886 4,706
 
Revenues 22,855 22,780 22,845 14,198 14,402
Short-term Activity Ratio
Working capital turnover1 2.77 2.46 2.56 2.41 3.06
Benchmarks
Working Capital Turnover, Industry
Materials 19.50 13.54 15.37 19.50 20.12

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Working capital turnover = Revenues ÷ Working capital
= 22,855 ÷ 8,250 = 2.77

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Freeport-McMoRan Inc. working capital turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Average Inventory Processing Period

Freeport-McMoRan Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Inventory turnover 2.59 2.91 3.12 2.99 3.22
Short-term Activity Ratio (no. days)
Average inventory processing period1 141 125 117 122 113
Benchmarks (no. days)
Average Inventory Processing Period, Industry
Materials 84 75 69 74 71

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.59 = 141

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Freeport-McMoRan Inc. number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023.

Average Receivable Collection Period

Freeport-McMoRan Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Receivables turnover 18.90 17.05 19.56 15.92 19.44
Short-term Activity Ratio (no. days)
Average receivable collection period1 19 21 19 23 19
Benchmarks (no. days)
Average Receivable Collection Period, Industry
Materials 39 39 40 44 43

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 18.90 = 19

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.

Operating Cycle

Freeport-McMoRan Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Average inventory processing period 141 125 117 122 113
Average receivable collection period 19 21 19 23 19
Short-term Activity Ratio
Operating cycle1 160 146 136 145 132
Benchmarks
Operating Cycle, Industry
Materials 123 114 109 118 114

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 141 + 19 = 160

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Freeport-McMoRan Inc. operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023.

Average Payables Payment Period

Freeport-McMoRan Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Payables turnover 6.36 5.59 6.89 7.91 7.92
Short-term Activity Ratio (no. days)
Average payables payment period1 57 65 53 46 46
Benchmarks (no. days)
Average Payables Payment Period, Industry
Materials 63 63 67 66 63

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 6.36 = 57

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Freeport-McMoRan Inc. number of days of payables outstanding increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Cash Conversion Cycle

Freeport-McMoRan Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Average inventory processing period 141 125 117 122 113
Average receivable collection period 19 21 19 23 19
Average payables payment period 57 65 53 46 46
Short-term Activity Ratio
Cash conversion cycle1 103 81 83 99 86
Benchmarks
Cash Conversion Cycle, Industry
Materials 60 51 42 52 51

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 141 + 19 – 57 = 103

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Freeport-McMoRan Inc. cash conversion cycle improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.