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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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
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Solvency Ratios (Summary)
Freeport-McMoRan Inc., solvency ratios (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 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).
The solvency position, as indicated by the presented ratios, demonstrates a generally stable trend over the analyzed period, spanning from March 2022 to December 2025. A consistent, albeit moderate, decrease in leverage is observed alongside improving coverage of interest expenses. These trends suggest a strengthening financial structure.
- Debt to Equity
- The debt to equity ratio exhibits a declining trend, moving from 0.65 in March 2022 to 0.50 in December 2025. While fluctuations occur, the overall direction indicates a reduced reliance on equity financing relative to debt. The rate of decline slows considerably after September 2023, suggesting a stabilization of the capital structure.
- Debt to Capital
- Similar to the debt to equity ratio, the debt to capital ratio shows a consistent decrease, starting at 0.39 in March 2022 and reaching 0.33 by December 2025. This reinforces the observation of decreasing leverage and a shift towards a more balanced capital structure. The decline is gradual and relatively consistent throughout the period.
- Debt to Assets
- The debt to assets ratio also demonstrates a downward trend, decreasing from 0.20 in March 2022 to 0.16 in December 2025. This indicates a decreasing proportion of assets financed by debt, further supporting the conclusion of improving solvency. The rate of decrease is consistent with the other debt ratios.
- Financial Leverage
- Financial leverage, measured as total assets to total equity, initially decreases from 3.28 in March 2022 to 3.08 in December 2025, with some fluctuation. While not a monotonic decrease, the overall trend suggests a slight reduction in the extent to which assets are financed by equity. A minor increase is observed in March 2024, but the ratio returns to a similar level by the end of the period.
- Interest Coverage
- The interest coverage ratio exhibits a notable improvement over the period. Starting at 16.40 in March 2022, it declines to a low of 9.73 in June 2023 before steadily increasing to 18.27 in December 2025. This indicates a significantly enhanced ability to meet interest obligations from earnings, suggesting reduced financial risk. The most substantial improvement occurs between June 2023 and December 2025.
In summary, the analyzed solvency ratios collectively suggest a strengthening financial position. The company demonstrates a consistent reduction in debt relative to equity, capital, and assets, coupled with a substantial improvement in its ability to cover interest expenses. These trends indicate a decreasing level of financial risk and a more sustainable capital structure.
Debt Ratios
Coverage Ratios
Debt to Equity
Freeport-McMoRan Inc., debt to equity calculation (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Q4 2025 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
The debt to equity ratio demonstrates a generally decreasing trend over the observed period, indicating a strengthening of the company’s financial position with respect to leverage. Initial values suggest a moderate level of debt relative to equity, which subsequently improves over time.
- Initial Period (Mar 31, 2022 – Dec 31, 2022)
- The debt to equity ratio began at 0.65 and increased to a peak of 0.74 by June 30, 2022. This initial increase suggests a rise in debt levels or a decrease in equity, or a combination of both. However, the ratio then decreased to 0.68 by the end of 2022, indicating a partial reversal of this trend.
- Decreasing Trend (Mar 31, 2023 – Dec 31, 2025)
- From March 31, 2023, the ratio consistently declined, moving from 0.60 to 0.50 by December 31, 2025. This consistent decrease suggests a deliberate strategy to reduce debt or increase equity, or a favorable combination of both. The rate of decline appears relatively steady throughout this period.
- Magnitude of Change
- The overall change in the debt to equity ratio from the beginning of the period (March 31, 2022) to the end (December 31, 2025) is a decrease of 0.15, representing a 23% reduction. This indicates a substantial improvement in the company’s solvency position.
- Recent Stability
- The ratio stabilizes at 0.50 for the final three reporting periods (September 30, 2025, December 31, 2025, and March 31, 2025), suggesting that the company has reached a desired level of financial leverage or that the factors driving the previous decline have stabilized.
The observed trend suggests that the company is becoming less reliant on debt financing and is strengthening its equity base. This could be viewed favorably by investors and creditors, as it indicates a reduced level of financial risk.
Debt to Capital
Freeport-McMoRan Inc., debt to capital calculation (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Q4 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
The debt to capital ratio for the analyzed period demonstrates a generally decreasing trend, indicating a strengthening solvency position. Initial values show a ratio of 0.39 in March 2022, peaking at 0.43 in June 2022, before commencing a decline. The ratio fluctuates modestly throughout the period, but the overall trajectory is downward.
- Initial Period (Mar 31, 2022 – Dec 31, 2022)
- The ratio begins at 0.39 and increases to 0.43 by June 2022. This initial increase suggests a relative rise in debt compared to capital. However, the ratio then decreases slightly to 0.41 by December 2022, indicating a stabilization or modest improvement in the capital structure.
- Subsequent Decline (Mar 31, 2023 – Dec 31, 2025)
- From March 2023 (0.38), the ratio consistently declines, reaching 0.33 by December 2025. This sustained decrease suggests a deliberate or organic reduction in reliance on debt financing relative to the company’s capital base. The decline is not linear, with minor fluctuations observed, but the overall trend remains firmly downward.
- Recent Fluctuations
- Between March 2024 and June 2025, the ratio remains relatively stable, fluctuating between 0.34 and 0.35. This suggests a period of consolidation in the capital structure, with no significant shifts in the debt-to-capital relationship. The final value of 0.33 in December 2025 represents a continuation of the long-term downward trend.
- Magnitude of Change
- The overall change in the debt to capital ratio from March 2022 to December 2025 is approximately 0.06, representing a 15.4% decrease. This indicates a notable improvement in the company’s financial leverage over the analyzed timeframe.
The observed trend suggests the company has been actively managing its debt levels or increasing its capital base, or a combination of both, resulting in a more conservative capital structure. The consistent decline in the ratio is a positive indicator of financial health and reduced risk.
Debt to Assets
Freeport-McMoRan Inc., debt to assets calculation (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Q4 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
The debt-to-assets ratio for the analyzed period demonstrates a generally decreasing trend, indicating a strengthening solvency position. Initial values show a ratio of 0.20 in March 2022, which increased to 0.22 by June 2022 before stabilizing and subsequently declining over the following quarters.
- Overall Trend
- From March 2022 through December 2025, the debt-to-assets ratio exhibits a consistent downward trajectory. The ratio decreased from 0.20 to 0.16, representing a reduction in leverage over the observed timeframe. While there are minor fluctuations, the overall pattern is clearly one of decreasing reliance on debt financing relative to the asset base.
- Short-Term Fluctuations
- A slight increase in the ratio is observed between March 2022 (0.20) and June 2022 (0.22). This was followed by a period of relative stability between June 2022 and December 2022, hovering around 0.21-0.22. The most significant decline occurred between September 2023 (0.18) and December 2024 (0.16).
- Recent Performance
- The ratio remained stable at 0.16 from March 2024 through December 2025. This suggests a potential plateau in the reduction of debt relative to assets, or a deliberate choice to maintain the current capital structure. The consistency in the most recent quarters indicates a controlled financial position.
- Magnitude of Change
- The total change in the debt-to-assets ratio over the period is 0.04 (from 0.20 to 0.16). This represents a 20% decrease in the proportion of assets financed by debt. The largest quarterly decrease occurred between September 2024 (0.17) and December 2024 (0.16).
The observed trend suggests a proactive approach to managing financial leverage. The consistent decline in the debt-to-assets ratio indicates a strengthening financial foundation and potentially reduced financial risk.
Financial Leverage
Freeport-McMoRan Inc., financial leverage calculation (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Q4 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
Financial leverage, as indicated by the ratio of total assets to stockholders’ equity, demonstrates a generally stable pattern over the observed period, spanning from March 31, 2022, to December 31, 2025. The ratio fluctuates within a relatively narrow range, suggesting a consistent capital structure throughout the analyzed timeframe.
- Overall Trend
- The financial leverage ratio begins at 3.28 in March 2022 and exhibits minor fluctuations before reaching 3.37 in June 2022. It then declines to 3.28 by December 2022. A continued downward trend is observed through June 2023, reaching a low of 3.14. The ratio experiences a slight increase to 3.19 by March 2024, followed by a decrease to 3.12 in December 2024. The final period shows a slight increase, concluding at 3.08 in December 2025.
- Short-Term Fluctuations
- Within the observed period, the most significant short-term change occurs between September 2022 (3.34) and March 2023 (3.17), representing a decrease of 0.17. A similar decrease is observed between June 2023 (3.14) and December 2024 (3.12). Conversely, the largest short-term increase occurs between December 2024 (3.12) and March 2025 (3.17).
- Long-Term Perspective
- From the beginning of the period (March 2022) to the end (December 2025), the financial leverage ratio decreased from 3.28 to 3.08, representing an overall reduction of 0.20. This suggests a gradual decrease in the reliance on debt financing relative to equity over the long term, although the change is modest.
- Recent Performance
- The most recent quarters show a slight upward trend, moving from 3.12 in December 2024 to 3.08 in December 2025. This suggests a potential shift towards increased financial leverage, although the magnitude of the change is small and requires further monitoring.
In summary, the financial leverage ratio remains relatively stable throughout the analyzed period, indicating a consistent approach to capital structure management. While minor fluctuations are present, the overall trend suggests a slight decrease in leverage, followed by a recent, minimal increase. The observed values suggest a moderate level of financial risk.
Interest Coverage
Freeport-McMoRan Inc., interest coverage calculation (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Q4 2025 Calculation
Interest coverage
= (EBITQ4 2025
+ EBITQ3 2025
+ EBITQ2 2025
+ EBITQ1 2025)
÷ (Interest expenseQ4 2025
+ Interest expenseQ3 2025
+ Interest expenseQ2 2025
+ Interest expenseQ1 2025)
= ( + + + )
÷ ( + + + )
=
The interest coverage ratio exhibits considerable fluctuation over the observed period, generally trending upwards with some quarterly variations. Initial values indicate a strong ability to meet interest obligations, which diminishes through the first half of 2023 before recovering and ultimately strengthening significantly.
- Initial Period (Mar 31, 2022 – Dec 31, 2022)
- The interest coverage ratio begins at 16.40 and demonstrates a gradual decline, settling at 13.05 by the end of 2022. While remaining above 13, this represents a reduction in the cushion available to cover interest expenses. This period coincides with fluctuating earnings before interest and tax (EBIT).
- 2023 – Early Weakness and Recovery
- The first half of 2023 shows a continued weakening of the interest coverage ratio, reaching a low of 9.73 in June. However, a recovery is observed in the latter half of the year, with the ratio increasing to 12.69 by December. This recovery aligns with an increase in EBIT during the same period.
- 2024 – Significant Improvement
- A substantial improvement in the interest coverage ratio is evident throughout 2024. The ratio rises from 14.57 in March to a peak of 22.70 in December. This increase is driven by both higher EBIT and a slight decrease in interest expense. The ratio consistently remains above 22 for most of the year.
- 2025 – Moderation
- The ratio begins to moderate in 2025, starting at 22.80 in March and decreasing to 18.27 by December. While still representing a healthy level of coverage, this suggests a potential stabilization or slight weakening of the company’s ability to comfortably cover its interest obligations compared to the peak levels seen in 2024. The decrease is linked to a decline in EBIT and a concurrent increase in interest expense.
- Interest Expense Impact
- Interest expense remains relatively stable throughout the period, with fluctuations generally remaining within a range of US$70 to US$171 million. The most significant impact on the interest coverage ratio appears to be driven by changes in EBIT, rather than substantial shifts in interest expense.
Overall, the interest coverage ratio demonstrates a generally positive trend, particularly in the latter half of the observed period. The company appears to have strengthened its ability to meet interest obligations, although recent quarters suggest a potential moderation of this trend.