Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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Solvency Ratios (Summary)
Freeport-McMoRan Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
The analysis of the financial ratios over the indicated periods reveals several important trends concerning the company’s capital structure, leverage, and interest coverage.
- Debt to Equity Ratio
- The debt to equity ratio has shown a general downward trend from 0.90 at the beginning of the period to 0.50 in the latest quarter. This steady reduction indicates a gradual decrease in reliance on debt relative to shareholders' equity, suggesting an improving equity base or a reduction in debt levels.
- Debt to Capital Ratio
- This ratio also exhibits a declining pattern, decreasing from 0.47 initially to 0.33 in the most recent quarter. The consistency in the decrease parallels the debt to equity ratio trend, reflecting a modest reduction in the proportion of debt within the company’s total capital structure.
- Debt to Assets Ratio
- The debt to assets ratio decreased from 0.22 down to 0.16 over the periods analyzed. This decline signals a reduced leverage at the asset level, reinforcing the notion of strengthening asset financing possibly through equity or asset growth.
- Financial Leverage
- Financial leverage diminished from 4.00 to 3.04, indicating a decrease in the use of borrowed funds to finance assets. The downward trajectory suggests the company is reducing financial risk and potential volatility in earnings attributable to debt obligations.
- Interest Coverage Ratio
- The interest coverage ratio improved significantly from 7.19 to an average near 22, peaking at 24.48 before a slight dip to 21.81 by the end of the period. This substantial increase implies enhanced ability to meet interest payments from operating earnings, which could be due to increased earnings, lower interest expenses, or both.
Overall, the company displays a clear trend of deleveraging with reductions in debt ratios and financial leverage. Concurrently, the marked improvement in interest coverage indicates stronger operational profitability and a more secure ability to service debt. These patterns collectively point to improving financial health and a conservative approach to capital management over the observed quarters.
Debt Ratios
Coverage Ratios
Debt to Equity
Freeport-McMoRan Inc., debt to equity calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q3 2025 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
The financial data reflects the company’s debt and equity positions over a series of quarterly periods from the first quarter of 2021 through the third quarter of 2025. The analysis highlights trends in total debt, stockholders' equity, and the debt-to-equity ratio.
- Total Debt
- The total debt shows a fluctuating pattern over the observed periods. Initially, total debt decreased slightly from approximately 9.8 billion US dollars at the beginning of 2021 to around 9.45 billion by the end of that year. This was followed by a notable increase in the first half of 2022, reaching a peak close to 11.1 billion US dollars. Subsequently, debt levels declined again and stabilized somewhat between 9.4 and 9.7 billion US dollars from early 2023 through the third quarter of 2025, with minor fluctuations. Overall, debt levels demonstrate a pattern of rising in early 2022 before resuming a downward or stable trajectory in subsequent years.
- Stockholders’ Equity
- Stockholders’ equity exhibited a consistent upward trend throughout the period. Starting at approximately 10.9 billion US dollars in Q1 2021, equity steadily increased each quarter, reaching around 18.7 billion by Q3 2025. The progression reflects sustained growth over the years, indicating improving net asset value and possibly retained earnings accumulation or issuance of additional equity. The pattern suggests strengthening financial stability and shareholder value enhancement.
- Debt to Equity Ratio
- The debt-to-equity ratio declined over time, signaling a reduction in leverage relative to equity. Beginning near 0.9 in early 2021, the ratio gradually decreased, with some minor increases coinciding with the debt surge noted in early 2022. Thereafter, this ratio resumed its downward trajectory, reaching approximately 0.5 by the third quarter of 2025. This indicates that despite fluctuations in absolute debt levels, equity growth outpaced debt, thereby lowering relative financial risk and enhancing balance sheet robustness.
In summary, the company appears to have strengthened its equity base consistently while managing debt levels with some volatility but an overall stabilization trend in later periods. The declining debt-to-equity ratio reinforces a movement toward a more conservative capital structure, improving the firm's financial resilience over the examined timeframe.
Debt to Capital
Freeport-McMoRan Inc., debt to capital calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q3 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
The financial data over the analyzed quarters reveals several notable trends in the company's leverage and capital structure.
- Total Debt
-
Total debt exhibited moderate fluctuations throughout the periods under review. Initially, from early 2021 to the end of 2021, total debt showed a decreasing trend, declining from approximately $9.8 billion to $9.45 billion. Subsequently, in 2022, there was a marked increase, peaking at around $11.1 billion in the second quarter, followed by a slight decline towards the year-end. From 2023 onwards, total debt steadily decreased again, reaching a low near $8.95 billion in the fourth quarter of 2024, before a slight upturn in early 2025 to close near $9.3 billion. This pattern suggests intermittent debt accumulation followed by phases of reduction, reflecting active debt management or changes in financing needs.
- Total Capital
-
Total capital consistently increased over the periods analyzed. Beginning at about $20.7 billion in the first quarter of 2021, it gradually rose, surpassing $26 billion by the end of 2022. This upward trajectory continued steadily through 2023 and into 2025, approaching $28 billion by the first quarter of 2025. The persistent increase in total capital indicates ongoing capital growth, possibly due to retained earnings, equity issuance, or asset appreciation, contributing to a strengthened financial base.
- Debt to Capital Ratio
-
The debt to capital ratio demonstrated a clear downward trend during the period. Starting at approximately 0.47 in the first quarter of 2021, the ratio steadily declined, with minor fluctuations, reaching about 0.33 by the first quarter of 2025. This declining ratio implies a gradual decrease in leverage relative to the company's overall capital structure, suggesting a strategic move towards reducing dependency on debt financing or an increase in equity base that outpaced debt growth.
In summary, the company has managed to grow its total capital significantly while controlling and reducing its relative debt burden, as evidenced by the downward trend in the debt to capital ratio. This pattern reflects an improving financial leverage position with a more robust capital structure over the analyzed timeframe.
Debt to Assets
Freeport-McMoRan Inc., debt to assets calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q3 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
The financial position reveals a generally stable total debt level fluctuating between approximately US$9.3 billion and US$11.1 billion over the observed periods. Total debt shows some peaks notably in mid-2022, reaching around US$11.1 billion, followed by a gradual decrease into 2024 and 2025, suggesting some debt reduction efforts or refinancing activities. Despite these fluctuations, debt remains relatively consistent in absolute terms.
Total assets exhibit a steady upward trajectory throughout the timeline, increasing from roughly US$43.6 billion in early 2021 to about US$56.8 billion by the end of the latest period. This consistent growth in asset base indicates ongoing capital investments, asset acquisitions, or appreciation of existing assets, contributing positively to the company's balance sheet strength.
The ratio of debt to assets demonstrates a clear declining trend over time. Starting at approximately 0.22 in early 2021, it decreases progressively to around 0.16 by late 2025. This decline indicates an improvement in the company's leverage position, reflecting either efficient debt management, growth in asset base outpacing debt accumulation, or a combination of both. The reduction in leverage enhances the financial stability and could potentially improve creditworthiness.
- Total Debt
- Relatively stable with moderate peaks and a gradual reduction trend post-mid-2022.
- Total Assets
- Consistent and significant growth, increasing total assets by approximately 30% over the analyzed period.
- Debt to Assets Ratio
- Continuous improvement in leverage profile, with the ratio declining from 0.22 to 0.16, indicating a stronger asset base relative to debt.
Financial Leverage
Freeport-McMoRan Inc., financial leverage calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q3 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
The analysis of the quarterly financial data reveals several notable trends in the company’s asset base, equity, and leverage over the presented periods.
- Total assets
- Total assets show a consistent upward trend from March 31, 2021, through September 30, 2025. Beginning at approximately $43.6 billion, the asset base steadily increases each quarter, reaching about $56.8 billion by the last reported period. While there are slight fluctuations in growth rates between some quarters, the overall trajectory reflects ongoing expansion in the company’s asset holdings.
- Stockholders’ equity
- Stockholders' equity also exhibits sustained growth throughout the timeframe, starting around $10.9 billion and increasing to nearly $18.7 billion by the end. The progression in equity is relatively steady with no marked volatility, suggesting consistent profitability retention, capital contributions, or other equity-augmenting activities. The steady increase in equity supports the strengthening of the company’s capital structure over time.
- Financial leverage
- The financial leverage ratio, which measures the relationship between total assets and stockholders’ equity, declines from a starting point of 4.00 in early 2021 to approximately 3.04 by the final quarter of 2025. This downward trend indicates a gradual reduction in leverage, meaning that the company is increasingly financing assets through equity rather than debt. This trend towards lower leverage typically signals a more conservative capital structure and a potential reduction in financial risk.
Overall, the data portrays a company that is expanding its asset base while simultaneously growing its equity and reducing reliance on leverage. These patterns imply strengthening financial stability and a more robust balance sheet profile over the analyzed period.
Interest Coverage
Freeport-McMoRan Inc., interest coverage calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q3 2025 Calculation
Interest coverage
= (EBITQ3 2025
+ EBITQ2 2025
+ EBITQ1 2025
+ EBITQ4 2024)
÷ (Interest expenseQ3 2025
+ Interest expenseQ2 2025
+ Interest expenseQ1 2025
+ Interest expenseQ4 2024)
= ( + + + )
÷ ( + + + )
=
- Earnings Before Interest and Tax (EBIT)
- The EBIT values fluctuate over the analyzed periods, indicating variability in operating profitability. Starting from US$1,541 million in the first quarter of 2021, EBIT shows a general upward trend in the first half of 2021, peaking at US$2,489 million in the third quarter of 2021. However, it declines sharply to US$1,015 million in the third quarter of 2022, reflecting a significant drop in operational earnings. Subsequently, EBIT recovers moderately toward the end of 2022 and through 2023, reaching a peak above US$2,000 million in the third quarter of 2024. The trend for the last reported period shows a decline to US$2,023 million in the third quarter of 2025, indicating some variability but overall resilience in profitability throughout the periods.
- Interest Expense, Net
- Interest expense demonstrates relatively minor fluctuations compared to EBIT but exhibits a subtle downward trend over time. The net interest cost begins at US$145 million in the first quarter of 2021, slightly increasing in mid-2021, then generally trending downward to as low as US$70 million during 2024 and mid-2025. The final data points show a slight increase again to US$107 million by the third quarter of 2025. This pattern indicates some success in managing financing costs, with temporary increases possibly related to changes in interest rates or debt levels.
- Interest Coverage Ratio
- The interest coverage ratio reflects the company's capacity to meet interest obligations through operating earnings. A steady improvement is evident from 7.19 in early 2021, peaking at 24.48 in mid-2025, suggesting enhanced financial health and a stronger buffer to cover interest expenses. There are some minor oscillations, but the ratio consistently stays well above 10 from late 2021 onward, indicating a robust ability to service debt despite fluctuations in EBIT and net interest expenses. The improvements in coverage ratio appear largely driven by both increased EBIT and controlled interest expenses over the period.