Financial statement analysis and common stock valuation

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

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Freeport-McMoRan Inc. reported financial statements reflect its operating performance and to their usefulness for forecasting future cash flows.
Aggregate accruals deriving measures of the accrual component of Freeport-McMoRan Inc. earnings.

• Balance-Sheet-Based Accruals Ratio
• Cash-Flow-Statement-Based Accruals Ratio

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data

Evaluates revenues and output generated by the Freeport-McMoRan Inc. assets. Operating performance ratios describe the relationship between the Freeport-McMoRan Inc. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle

Analysis of Short-term (Operating) Activity Ratios

Evaluates revenues and output generated by the Freeport-McMoRan Inc. assets. Operating performance ratios describe the relationship between the Freeport-McMoRan Inc. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle
• Average Payables Payment Period
• Cash Conversion Cycle

Analysis of Solvency Ratios

Examines Freeport-McMoRan Inc. capital structure in terms of the mix of its financing sources and the ability of the firm to satisfy its longer-term debt and investment obligations.

• Solvency Ratios (Summary)
• Debt to Equity
• Debt to Equity (including Operating Lease Liability)
• Debt to Capital
• Debt to Capital (including Operating Lease Liability)
• Debt to Assets
• Debt to Assets (including Operating Lease Liability)
• Financial Leverage
• Interest Coverage
• Fixed Charge Coverage

Analysis of Long-term (Investment) Activity Ratios

Measures how efficiently Freeport-McMoRan Inc. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
• Total Asset Turnover
• Equity Turnover

Analysis of Revenues

• Revenues as Reported

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.

Common-Size Balance Sheet: Assets

Assets components shown as percentage of total assets.

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

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about Freeport-McMoRan Inc. cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on Freeport-McMoRan Inc. balance sheet.

Analysis of Geographic Areas

Freeport-McMoRan Inc. operates in 4 regions: Indonesia; U.S.; Chile; and Other.

• Area Asset Turnover
• Long-lived assets
• Revenues