Freeport-McMoRan Inc. (NYSE:FCX)

The analysis of the financial ratios and periods reveals several trends and patterns in operational efficiency and working capital management over the observed quarters.

Inventory Turnover

The inventory turnover ratio showed a generally declining trend starting from 2.99 in early 2021, with fluctuations throughout the periods. It peaked slightly at 3.25 in both December 2020 and June 2022 but gradually decreased to about 2.61 by mid-2025. This pattern indicates some challenges in converting inventory to sales at a consistent pace, with a moderate slowdown in inventory movement in recent periods.

Receivables Turnover

The receivables turnover ratio demonstrated notable volatility, ranging broadly between 13.02 and 44.04. Initial quarters in 2021 showed moderate activity; however, the ratio surged to a high of 44.04 in June 2025 and then moderated afterward. This indicates periods of improved efficiency in collecting receivables, though with significant fluctuations reflecting variability in credit management or sales terms.

Working Capital Turnover

The working capital turnover ratio presented a mostly upward progression, increasing from 2.41 in early 2021 to a peak of 3.26 in March 2025. Although slight decreases occurred at certain intervals, the overall increase suggests enhanced effectiveness in utilizing working capital to generate sales over time.

Average Inventory Processing Period (Days)

The average inventory processing period fluctuated but tended to increase from 112 days in December 2020 to approximately 140-147 days by mid-2025. These rising days imply slower inventory turnover, consistent with the observed decrease in the inventory turnover ratio, indicating potential operational inefficiencies or changes in inventory management policies.

Average Receivable Collection Period (Days)

The receivable collection period experienced a decline from 23 days at the end of 2020 to a low of 8 days in September 2024, followed by slight increases thereafter. This decreasing trend signifies improvements in collecting receivables faster, enhancing cash flow and reducing the risk of outstanding debts.

Operating Cycle (Days)

The operating cycle, combining inventory processing and receivable collection periods, fluctuated within a range of roughly 128 to 160 days. It slightly increased over the years, peaking around 158 days by early 2025, reflecting an overall lengthening of the company's operating cycle, which may impact liquidity and efficiency.

In summary, the data suggests that while collection of receivables has improved, inventory turnover and processing periods indicate some inefficiencies or slower inventory management in recent periods. Working capital utilization appears to have improved, supporting sales generation, but the lengthening operating cycle may pose challenges for working capital and cash flow management going forward.

The quarterly financial data shows several notable trends in cost of sales, inventories, and inventory turnover ratios over the period analyzed.

Cost of Sales

The cost of sales demonstrates a general upward trend with some fluctuations. Starting at $3,108 million in the first quarter of 2020, the amount decreased slightly mid-year but resumed an increasing trajectory through 2021 and 2022. The peak values appear in the last quarters of each year, notably reaching $5,950 million in the last quarter of 2024, before showing a slight decline in the subsequent quarters. This pattern suggests seasonal or cyclical behavior in the company's cost structure.

Inventories

Inventories consistently increased over the entire period. Beginning at $3,854 million in the first quarter of 2020, there was a steady rise to $6,954 million by the second quarter of 2025. This continuous growth may indicate accumulation of stock, possibly due to procurement strategies or changes in demand expectations. The increase in inventory levels outpaces that of cost of sales, signaling a strategic build-up of assets or slower turnover.

Inventory Turnover Ratio

The inventory turnover ratio exhibits a declining trend from a high of approximately 3.25 in the early part of the data to values close to 2.48 in later periods. Lower turnover ratios imply that inventories are being sold or used more slowly over time. This decline complements the observed inventory accumulation and may point to changing market conditions, reduced demand, or shifts in inventory management practices.

Overall, the data indicates rising costs and inventory holdings alongside decreasing turnover efficiency. The patterns suggest strategic or operational shifts that could affect working capital and profitability, warranting further analysis into sales trends and supply chain management.

The financial data reveals several trends across revenues, trade accounts receivable, and receivables turnover ratio over multiple quarters.

Revenues

Revenues generally show an upward trajectory from the first quarter of 2020 through to the third quarter of 2024, marked by fluctuations in some quarters. Beginning at $2,798 million in early 2020, revenues increased steadily, peaking at $6,790 million in the third quarter of 2024. However, notable declines occurred in mid-2022 and in early 2025, where revenues dropped to around $5,003 million and $5,720 million respectively. The data indicates strong revenue growth overall, with intermittent periods of decline or slower growth.

Trade Accounts Receivable

The trade accounts receivable values fluctuate markedly throughout the period, with an initial increase from $515 million in early 2020 to a peak of $1,537 million in the first quarter of 2022. This peak coincides with a high revenue period but is followed by significant declines to $578 million by the first quarter of 2025. The variability in receivables may suggest changes in credit terms, collections efficiency, or sales mix over time. Several quarters, such as mid-2023, exhibit notably lower receivables alongside moderate revenues, implying possible improvements in receivables management or shifts in customer payment behavior.

Receivables Turnover Ratio

Receivables turnover exhibits considerable volatility, with values ranging from approximately 13.02 to 44.04 over the measured periods. Higher ratios generally reflect faster collection of receivables. The ratio peaks notably in mid-2023 and mid-2025, indicating periods of improved receivables turnover efficiency. Conversely, troughs in the ratio occur around mid-2020 and mid-2021, corresponding to periods when trade accounts receivable were relatively elevated. The fluctuations in the ratio suggest varying effectiveness in credit and collections policies, potentially influenced by broader operational or economic conditions.

In summary, revenues demonstrate an overall positive trend with intermittent fluctuations; trade accounts receivable show substantial variability that may reflect changes in credit management; and the receivables turnover ratio experiences marked swings indicative of fluctuating collection performance. The interplay between these metrics suggests periods of operational adjustment and evolving financial management strategies.

Working Capital

The working capital demonstrates a generally increasing trend from March 31, 2020, to June 30, 2021, rising steadily from 4,214 million USD to 7,072 million USD. This growth continues, peaking in June 30, 2022 at 10,250 million USD. However, following this peak, there is a gradual decline, with some fluctuations, decreasing to 8,250 million USD by December 31, 2023. In the subsequent periods up to June 30, 2025, the working capital fluctuates mildly, remaining within the 7,800 to 8,600 million USD range, indicating a stabilization after the previous decline.

Revenues

Revenues exhibit a general upward trajectory from March 31, 2020, starting at 2,798 million USD and rising consistently through most periods to various peaks at different points. Notably, there is a peak period around December 31, 2021, reaching 6,164 million USD, followed by a decrease in the first three quarters of 2022. Revenues decline to a low around September 30, 2022, at 5,003 million USD but recover thereafter, reaching 6,790 million USD by September 30, 2024. A downward trend follows in early 2025, before a sharp increase to 7,582 million USD by June 30, 2025. This pattern reflects some volatility with cyclic peaks and troughs, but an overall growth trend over the observed periods.

Working Capital Turnover

Working capital turnover ratios begin to be reported in September 30, 2020, with a ratio of 2.41. This metric generally increases over time, showing improved efficiency in generating revenues from working capital. An upward pattern is evident, with intermittent fluctuations around the 2.3 to 2.6 range until the end of 2022. From 2023 onward, there is a clear upward trend in turnover ratios, climbing from approximately 2.28 to a peak of 3.26 by June 30, 2025. This suggests enhanced management of working capital relative to revenues, indicating improved operational efficiency despite some revenue volatility.

Overall Insights

The data reveals that working capital grew significantly from 2020 into mid-2022 before stabilizing. Revenues show cyclicality with peaks and troughs but maintain an upward trend over the entire timeframe. The rise in working capital turnover ratios signals increasing operational efficiency in utilizing working capital to generate sales. This combination of trends suggests that while the company experiences fluctuations in revenues, its management of working capital has improved, supporting stronger revenue generation capabilities relative to the capital employed.

The data demonstrates patterns in inventory management metrics over multiple quarters, specifically focusing on inventory turnover ratio and average inventory processing period.

Inventory Turnover Ratio

The inventory turnover ratio appears to have peaked in the fourth quarter of 2020 at 3.25 and generally remained around the 3.00 mark throughout 2021 and early 2022. Starting in 2023, the ratio shows a gradual declining trend from 2.91 in the first quarter to a low of 2.48 mid-2025, with slight fluctuations near the end of the data set. This declining turnover ratio suggests that inventory is being sold or used less frequently over time, implying potentially slower movement of inventory.

Average Inventory Processing Period

The average inventory processing period is inversely related to the inventory turnover ratio, expressed in the number of days. It decreased initially from 122 days in Q1 2020 to 112 days by the end of 2020, indicating a quicker turnaround of inventory. Subsequently, the processing period fluctuated around 115-120 days during 2021 and early 2022. From 2023 onwards, the processing period rose steadily, peaking at 147 days mid-2025, before settling back to around 140 days. This increasing trend reflects a slower inventory processing time, consistent with the falling turnover ratio.

Overall, the data indicates a shift toward slower inventory turnover and longer inventory processing periods from 2023 forward. This may point to changes in sales velocity, inventory management strategies, or external market conditions influencing inventory dynamics during this period.

Receivables Turnover Ratio

The receivables turnover ratio shows volatility across the reported quarterly periods. Starting from a value of 15.92 in March 2021, the ratio decreased to 13.02 in June 2021, followed by a notable increase to 17.22 in September 2021 and a further rise to 22.75 in December 2021. This upward trend continued until December 2022, reaching a high of 27.47. Subsequently, the ratio experienced fluctuations, declining to 17.05 in March 2023, rising again to 32.43 in September 2023, then declining and rising intermittently through December 2024. The highest value occurs in March 2025 at 44.04, indicating a significant increase in receivables turnover efficiency at that time. Overall, the pattern reflects periods of both improvement and regression in how quickly receivables are collected.

Average Receivable Collection Period (Days)

The average collection period in days inversely corresponds to the receivables turnover ratio, as expected. The initial value recorded in March 2021 is 23 days, increasing to 28 days in June 2021, indicating slower collection initially during the period. Subsequently, the collection period shortened to 16 days by December 2021, marking a period of improved efficiency. This improvement is partially maintained through mid-2022 with values around 15 to 13 days. A longer collection period reemerges, peaking at 21 days in March 2023, before improving again toward lower values such as 8 days in March 2025, the shortest period in the observed data. The collection period experiences regular fluctuations but shows an overall trend of decreasing days over the full timeline, which suggests enhanced efficiency in receivables management over time.

Relationship and Insights

The data reveal a clear inverse relationship between the receivables turnover ratio and the average collection period, consistent with financial theory. Periods of high turnover ratio correspond to reduced collection days, reflecting faster cash conversion cycles. The fluctuations suggest operational or market-related dynamics affecting collections, but the long-term trend indicates an improvement in receivables management efficiency. The significant spike in turnover ratio toward early 2025 combined with the lowest collection period suggests a possible strategic shift or one-time effect improving liquidity. Attention to the causes behind volatility may be warranted for risk management and forecasting.

Average Inventory Processing Period

The average inventory processing period shows a rising trend from March 2021 through December 2025. Starting at 122 days in March 2021, it fluctuates but generally increases to 140 days by June 2025. Notable periods include a peak of 147 days in March 2025 and another high value of 141 days in December 2023. This indicates a gradual lengthening in the time inventory remains on hand before processing, suggesting potential challenges in inventory turnover or changes in inventory management strategies over the periods analyzed.

Average Receivable Collection Period

The average receivable collection period displays greater variability across the quarters. Beginning at 23 days in March 2021, it experiences decreases and increases throughout the timeline, reaching a low point of 8 days in March 2025. Generally, there is a downward tendency by the later periods (2024-2025), with oscillations in the short-term intervals. The shorter collection periods in 2024 and 2025 can imply improved efficiency in receivables management or stricter credit terms with customers, facilitating quicker cash inflows.

Operating Cycle

The operating cycle, which is the sum of inventory processing and receivable collection periods, reflects the combined trends of these components. It rises from 145 days in March 2021 to a peak of 160 days in December 2023, followed by oscillations staying mostly above 148 days in subsequent quarters. This sustained higher operating cycle suggests there is an overall increase in the time taken from inventory acquisition to cash collection, likely influenced more by the lengthening inventory period despite some improvements in receivables collection. The persistent elevated operating cycle may indicate capital is tied up longer in operations, potentially affecting liquidity.