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)

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.

Common Stock Valuation Ratios
Quarterly Data

Relative valuation technique determine the value of Freeport-McMoRan Inc. by comparing it to similar entities (like industry or sector) on the basis of several relative ratios that compare its stock price to relevant variables that affect the stock value, such as earnings, book value, and sales.

• Historical Valuation Ratios (Summary)
• Price to Earnings (P/E)
• Price to Operating Profit (P/OP)
• Price to Sales (P/S)
• Price to Book Value (P/BV)

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

Common-Size Income Statement

Income statement components (revenues and expenses) shown as percentage of total sales.

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)

Analysis of Geographic Areas

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

• Area Asset Turnover
• Long-lived assets
• Revenues

Balance Sheet: Assets

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

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
Quarterly Data

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
• Total Asset Turnover
• Equity Turnover

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 Liquidity Ratios
Quarterly Data

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

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