Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Newmont Corp., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
An analysis of the solvency metrics from 2019 to 2023 reveals a divergence between a stable capital structure and a significantly deteriorating ability to service debt obligations. While leverage ratios remained consistent throughout the period, coverage ratios experienced a severe downward trajectory, culminating in negative values by the end of 2023.
- Capital Structure and Leverage Ratios
- The debt to equity, debt to capital, and debt to assets ratios remained remarkably stable over the five-year period. The debt to equity ratio fluctuated within a narrow range, starting at 0.32 in 2019 and ending at 0.33 in 2023. Similarly, the debt to capital ratio showed minimal variance, moving from 0.24 to 0.25, while the debt to assets ratio remained essentially flat at approximately 0.16 to 0.17. The inclusion of operating lease liabilities had a negligible impact on these metrics, indicating that lease obligations do not significantly alter the overall leverage profile.
- Financial Leverage
- Financial leverage exhibited slight volatility but stayed within a tight corridor. The ratio moved from 1.87 in 2019 to a peak of 1.99 in 2022, before settling at 1.91 in 2023. This stability suggests that the proportional relationship between total assets and equity was maintained without aggressive expansion or significant contraction of the balance sheet.
- Debt Service Coverage
- A critical decline is observed in the company's ability to meet fixed financial obligations. The interest coverage ratio fell precipitously from 13.58 in 2019 to -7.10 in 2023. A parallel trend is evident in the fixed charge coverage ratio, which decreased from 12.73 in 2019 to -6.40 in 2023. The transition from high positive coverage to negative values indicates that earnings have become insufficient to cover interest and fixed charges, signaling a substantial increase in solvency risk despite the stable levels of total debt relative to equity and assets.
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Debt to Equity
Newmont Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current finance lease and other financing obligations | 114) | 96) | 106) | 106) | 100) | |
| Current debt | 1,923) | —) | 87) | 551) | —) | |
| Non-current debt | 6,951) | 5,571) | 5,565) | 5,480) | 6,138) | |
| Non-current finance lease and other financing obligations | 448) | 465) | 544) | 565) | 596) | |
| Total debt | 9,436) | 6,132) | 6,302) | 6,702) | 6,834) | |
| Total Newmont stockholders’ equity | 29,027) | 19,354) | 22,022) | 23,008) | 21,420) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.33 | 0.32 | 0.29 | 0.29 | 0.32 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Freeport-McMoRan Inc. | 0.56 | 0.68 | 0.68 | — | — | |
| Debt to Equity, Industry | ||||||
| Materials | 0.65 | 0.67 | 0.55 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Total Newmont stockholders’ equity
= 9,436 ÷ 29,027 = 0.33
2 Click competitor name to see calculations.
The solvency profile of the organization remained stable over the five-year period analyzed, characterized by a consistent balance between debt obligations and shareholder equity despite significant fluctuations in absolute values during the final year.
- Total Debt Trends
- Between 2019 and 2022, total debt exhibited a steady downward trajectory, decreasing from US$ 6,834 million to US$ 6,132 million. This period of deleveraging was followed by a sharp increase in 2023, where total debt rose to US$ 9,436 million, marking a substantial deviation from the prior four-year trend.
- Stockholders' Equity Trends
- Equity demonstrated moderate volatility from 2019 to 2022, reaching a peak of US$ 23,008 million in 2020 before declining to US$ 19,354 million in 2022. Similar to the debt trend, 2023 saw a significant surge in equity, which climbed to US$ 29,027 million.
- Debt to Equity Ratio Interpretation
- The debt to equity ratio remained remarkably constrained, fluctuating within a narrow range between 0.29 and 0.33. While the ratio dipped to 0.29 in 2020 and 2021, it returned to 0.32 in 2022 and concluded at 0.33 in 2023. The fact that the ratio remained nearly constant in 2023, despite the sharp increase in total debt, indicates that the expansion of liabilities was proportionally matched by a corresponding increase in stockholders' equity, thereby preserving the organization's solvency equilibrium.
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Debt to Equity (including Operating Lease Liability)
Newmont Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current finance lease and other financing obligations | 114) | 96) | 106) | 106) | 100) | |
| Current debt | 1,923) | —) | 87) | 551) | —) | |
| Non-current debt | 6,951) | 5,571) | 5,565) | 5,480) | 6,138) | |
| Non-current finance lease and other financing obligations | 448) | 465) | 544) | 565) | 596) | |
| Total debt | 9,436) | 6,132) | 6,302) | 6,702) | 6,834) | |
| Current operating lease obligations | 24) | 26) | 27) | 17) | 28) | |
| Non-current operating lease obligations | 81) | 90) | 101) | 91) | 47) | |
| Total debt (including operating lease liability) | 9,541) | 6,248) | 6,430) | 6,810) | 6,909) | |
| Total Newmont stockholders’ equity | 29,027) | 19,354) | 22,022) | 23,008) | 21,420) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.33 | 0.32 | 0.29 | 0.30 | 0.32 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Freeport-McMoRan Inc. | 0.59 | 0.70 | 0.70 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Materials | 0.70 | 0.72 | 0.60 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Newmont stockholders’ equity
= 9,541 ÷ 29,027 = 0.33
2 Click competitor name to see calculations.
The solvency profile of the organization demonstrates a consistent approach to leverage management between 2019 and 2023, characterized by a stable debt-to-equity ratio despite significant fluctuations in absolute balance sheet values.
- Total Debt Dynamics
- A gradual reduction in total debt, including operating lease liabilities, was observed from 2019 through 2022, with values declining from US$ 6,909 million to US$ 6,248 million. This downward trend was reversed in 2023, where total debt increased sharply to US$ 9,541 million, representing a substantial increase in total liabilities.
- Equity Position Evolution
- Stockholders' equity experienced volatility during the analyzed period, rising to US$ 23,008 million in 2020 before contracting to a period low of US$ 19,354 million by the end of 2022. A significant expansion occurred in 2023, with equity increasing to US$ 29,027 million.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio remained within a narrow range of 0.29 to 0.33 over the five-year span. A slight improvement in solvency was noted between 2019 and 2021, as the ratio decreased from 0.32 to 0.29. Although total debt rose significantly in 2023, the simultaneous and proportional increase in stockholders' equity mitigated the impact on the leverage ratio, which concluded the period at 0.33, nearly aligning with 2019 levels.
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Debt to Capital
Newmont Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current finance lease and other financing obligations | 114) | 96) | 106) | 106) | 100) | |
| Current debt | 1,923) | —) | 87) | 551) | —) | |
| Non-current debt | 6,951) | 5,571) | 5,565) | 5,480) | 6,138) | |
| Non-current finance lease and other financing obligations | 448) | 465) | 544) | 565) | 596) | |
| Total debt | 9,436) | 6,132) | 6,302) | 6,702) | 6,834) | |
| Total Newmont stockholders’ equity | 29,027) | 19,354) | 22,022) | 23,008) | 21,420) | |
| Total capital | 38,463) | 25,486) | 28,324) | 29,710) | 28,254) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.25 | 0.24 | 0.22 | 0.23 | 0.24 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Freeport-McMoRan Inc. | 0.36 | 0.41 | 0.40 | — | — | |
| Debt to Capital, Industry | ||||||
| Materials | 0.39 | 0.40 | 0.36 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 9,436 ÷ 38,463 = 0.25
2 Click competitor name to see calculations.
The solvency profile remains stable over the analyzed five-year period, characterized by a consistent debt to capital ratio despite significant fluctuations in absolute debt and capital levels. A notable shift occurred in 2023, where both total debt and total capital increased substantially, yet the overall leverage proportion remained well-controlled.
- Total Debt Trends
- A gradual downward trend in total debt was observed from 2019 to 2022, with obligations decreasing from US$ 6,834 million to US$ 6,132 million. This period of deleveraging was reversed in 2023, which saw a sharp increase in total debt to US$ 9,436 million, representing a significant expansion of the company's borrowing.
- Total Capital Evolution
- Total capital experienced a period of contraction between 2020 and 2022, reaching a minimum of US$ 25,486 million. However, by December 31, 2023, total capital grew markedly to US$ 38,463 million, indicating a substantial influx of capital that occurred concurrently with the increase in debt.
- Debt to Capital Ratio Analysis
- The debt to capital ratio demonstrated minimal volatility, ranging between 0.22 and 0.25. The ratio reached its lowest point of 0.22 in 2021 before returning to 0.24 in 2022 and increasing slightly to 0.25 in 2023. The stability of this ratio, particularly during the 2023 surge in absolute debt, suggests that the growth in total capital was proportional to the increase in debt, maintaining a consistent capital structure and solvency level.
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Debt to Capital (including Operating Lease Liability)
Newmont Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current finance lease and other financing obligations | 114) | 96) | 106) | 106) | 100) | |
| Current debt | 1,923) | —) | 87) | 551) | —) | |
| Non-current debt | 6,951) | 5,571) | 5,565) | 5,480) | 6,138) | |
| Non-current finance lease and other financing obligations | 448) | 465) | 544) | 565) | 596) | |
| Total debt | 9,436) | 6,132) | 6,302) | 6,702) | 6,834) | |
| Current operating lease obligations | 24) | 26) | 27) | 17) | 28) | |
| Non-current operating lease obligations | 81) | 90) | 101) | 91) | 47) | |
| Total debt (including operating lease liability) | 9,541) | 6,248) | 6,430) | 6,810) | 6,909) | |
| Total Newmont stockholders’ equity | 29,027) | 19,354) | 22,022) | 23,008) | 21,420) | |
| Total capital (including operating lease liability) | 38,568) | 25,602) | 28,452) | 29,818) | 28,329) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.25 | 0.24 | 0.23 | 0.23 | 0.24 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Freeport-McMoRan Inc. | 0.37 | 0.41 | 0.41 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Materials | 0.41 | 0.42 | 0.38 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 9,541 ÷ 38,568 = 0.25
2 Click competitor name to see calculations.
An analysis of the solvency structure between 2019 and 2023 reveals a period of gradual debt reduction followed by a significant expansion in both debt and total capital. Total debt, including operating lease liabilities, decreased steadily from 6,909 million USD in 2019 to a low of 6,248 million USD in 2022. However, 2023 marked a substantial shift, with total debt increasing to 9,541 million USD. This coincided with a significant rise in total capital, which grew from 25,602 million USD in 2022 to 38,568 million USD in 2023.
- Debt to Capital Ratio Stability
- The debt to capital ratio remained remarkably stable over the five-year period, fluctuating within a narrow range between 0.23 and 0.25. Despite the substantial increase in absolute debt levels in 2023, the ratio only marginally increased to 0.25, indicating that the increase in debt was proportionally matched by an expansion in total capital.
- Solvency Trend Observations
- Between 2019 and 2021, a slight downward trend in the ratio was observed, moving from 0.24 to 0.23. This suggests a period of deleveraging or capital growth that outpaced debt accumulation. The consistency of the ratio through 2023 suggests a disciplined approach to maintaining the capital structure, ensuring that the increased leverage did not disproportionately alter the overall solvency profile.
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Debt to Assets
Newmont Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current finance lease and other financing obligations | 114) | 96) | 106) | 106) | 100) | |
| Current debt | 1,923) | —) | 87) | 551) | —) | |
| Non-current debt | 6,951) | 5,571) | 5,565) | 5,480) | 6,138) | |
| Non-current finance lease and other financing obligations | 448) | 465) | 544) | 565) | 596) | |
| Total debt | 9,436) | 6,132) | 6,302) | 6,702) | 6,834) | |
| Total assets | 55,506) | 38,482) | 40,564) | 41,369) | 39,974) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.17 | 0.16 | 0.16 | 0.16 | 0.17 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Freeport-McMoRan Inc. | 0.18 | 0.21 | 0.20 | — | — | |
| Debt to Assets, Industry | ||||||
| Materials | 0.25 | 0.26 | 0.22 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 9,436 ÷ 55,506 = 0.17
2 Click competitor name to see calculations.
The company's solvency profile exhibited remarkable stability between 2019 and 2023, characterized by a consistent debt-to-assets ratio despite significant fluctuations in the underlying balance sheet components during the final year of the period.
- Total Debt Evolution
- A consistent downward trend in total debt was observed from 2019 through 2022, with obligations decreasing from US$ 6,834 million to US$ 6,132 million. This period of deleveraging was followed by a substantial increase in 2023, where total debt rose to US$ 9,436 million.
- Total Assets Performance
- Total assets showed relative stability from 2019 to 2022, moving within a range of US$ 38,482 million to US$ 41,369 million. A significant expansion occurred in 2023, with total assets increasing to US$ 55,506 million, suggesting a major acquisition or capital investment during that fiscal year.
- Debt to Assets Ratio Stability
- The debt-to-assets ratio remained nearly stagnant over the five-year horizon, fluctuating minimally between 0.16 and 0.17. The ratio held steady at 0.16 from 2020 to 2022 and returned to 0.17 in 2023. The fact that the ratio remained unchanged despite the sharp increase in total debt indicates that the additional liabilities were utilized to acquire assets of proportional value, thereby maintaining a constant solvency risk profile.
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Debt to Assets (including Operating Lease Liability)
Newmont Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current finance lease and other financing obligations | 114) | 96) | 106) | 106) | 100) | |
| Current debt | 1,923) | —) | 87) | 551) | —) | |
| Non-current debt | 6,951) | 5,571) | 5,565) | 5,480) | 6,138) | |
| Non-current finance lease and other financing obligations | 448) | 465) | 544) | 565) | 596) | |
| Total debt | 9,436) | 6,132) | 6,302) | 6,702) | 6,834) | |
| Current operating lease obligations | 24) | 26) | 27) | 17) | 28) | |
| Non-current operating lease obligations | 81) | 90) | 101) | 91) | 47) | |
| Total debt (including operating lease liability) | 9,541) | 6,248) | 6,430) | 6,810) | 6,909) | |
| Total assets | 55,506) | 38,482) | 40,564) | 41,369) | 39,974) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.17 | 0.16 | 0.16 | 0.16 | 0.17 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Freeport-McMoRan Inc. | 0.19 | 0.21 | 0.20 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Materials | 0.27 | 0.28 | 0.24 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 9,541 ÷ 55,506 = 0.17
2 Click competitor name to see calculations.
An evaluation of the solvency position from 2019 to 2023 reveals a period of relative stability followed by a significant expansion of the balance sheet. The Debt to Assets ratio remained consistent throughout the five-year period, fluctuating minimally between 0.16 and 0.17.
- Total Debt Trends
- Between 2019 and 2022, total debt, including operating lease liabilities, exhibited a gradual downward trend, decreasing from US$ 6,909 million to US$ 6,248 million. However, 2023 marked a significant departure from this trajectory, with total debt increasing sharply to US$ 9,541 million.
- Total Asset Trends
- Total assets remained relatively stable between 2019 and 2022, fluctuating within a range of approximately US$ 38.5 billion to US$ 41.4 billion. In 2023, there was a substantial increase in the asset base, with total assets rising to US$ 55,506 million.
- Debt to Assets Ratio Interpretation
- The Debt to Assets ratio remained stable at 0.16 from 2020 through 2022, following an initial value of 0.17 in 2019. Despite the sharp increase in nominal debt during 2023, the concurrent growth in total assets ensured that the ratio returned to 0.17. This suggests that the acquisition or growth of assets was financed in a manner that maintained a proportional leverage level, keeping the overall solvency profile consistent with historical benchmarks.
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Financial Leverage
Newmont Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 55,506) | 38,482) | 40,564) | 41,369) | 39,974) | |
| Total Newmont stockholders’ equity | 29,027) | 19,354) | 22,022) | 23,008) | 21,420) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.91 | 1.99 | 1.84 | 1.80 | 1.87 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Freeport-McMoRan Inc. | 3.15 | 3.28 | 3.44 | — | — | |
| Financial Leverage, Industry | ||||||
| Materials | 2.60 | 2.61 | 2.49 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Total Newmont stockholders’ equity
= 55,506 ÷ 29,027 = 1.91
2 Click competitor name to see calculations.
The financial structure demonstrates a period of relative stability between 2019 and 2022, followed by a significant expansion of the balance sheet in 2023. While total assets and equity experienced moderate fluctuations in the early part of the period, the overall financial leverage remained within a narrow range, indicating a consistent approach to the capital structure despite changes in asset scale.
- Financial Leverage Trajectory
- The financial leverage ratio exhibited minor volatility, starting at 1.87 in 2019 and declining slightly to 1.80 in 2020. A gradual upward trend followed, peaking at 1.99 in 2022, which represents the highest level of leverage within the analyzed timeframe. By 2023, the ratio moderated to 1.91, suggesting a slight reduction in the reliance on debt relative to equity.
- Asset and Equity Correlation
- A strong correlation is observed between the movement of total assets and stockholders' equity. Both metrics saw a decline leading into 2022, with assets dropping to 38,482 million US dollars and equity falling to 19,354 million US dollars. This simultaneous contraction contributed to the peak leverage ratio observed in 2022.
- 2023 Balance Sheet Expansion
- A substantial increase in financial scale occurred in 2023, characterized by a surge in total assets to 55,506 million US dollars and total stockholders' equity to 29,027 million US dollars. The magnitude of this growth is significant, as equity increased by approximately 50% compared to 2022 levels. The fact that the financial leverage ratio decreased during this expansion indicates that the growth in assets was primarily funded through equity or a balanced mix of financing that did not disproportionately increase the debt burden.
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Interest Coverage
Newmont Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Newmont stockholders | (2,494) | (429) | 1,166) | 2,829) | 2,805) | |
| Add: Net income attributable to noncontrolling interest | 27) | 60) | (933) | (38) | 79) | |
| Less: Net income (loss) from discontinued operations | 27) | 30) | 57) | 163) | (72) | |
| Add: Income tax expense | 526) | 455) | 1,098) | 704) | 832) | |
| Add: Interest expense, net of capitalized interest | 243) | 227) | 274) | 308) | 301) | |
| Earnings before interest and tax (EBIT) | (1,725) | 283) | 1,548) | 3,640) | 4,089) | |
| Solvency Ratio | ||||||
| Interest coverage1 | -7.10 | 1.25 | 5.65 | 11.82 | 13.58 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Freeport-McMoRan Inc. | 12.69 | 13.05 | 13.73 | — | — | |
| Interest Coverage, Industry | ||||||
| Materials | 14.00 | 14.30 | 15.36 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= -1,725 ÷ 243 = -7.10
2 Click competitor name to see calculations.
The analysis of solvency metrics over the five-year period from 2019 to 2023 reveals a severe deterioration in the capacity to service debt obligations through operational earnings.
- Earnings Before Interest and Tax (EBIT) Trend
- A precipitous downward trend is observed in EBIT, which declined from US$ 4,089 million in 2019 to a deficit of US$ 1,725 million by December 31, 2023. The most significant contractions occurred after 2020, culminating in a complete transition from operational profitability to a substantial operating loss in the final year of the period.
- Net Interest Expense Stability
- Interest expenses remained relatively stable, fluctuating within a narrow range between US$ 227 million and US$ 308 million. This lack of volatility suggests that the deterioration in the company's financial position is driven by a collapse in operational performance rather than an increase in borrowing costs or debt loads.
- Interest Coverage Ratio Analysis
- The interest coverage ratio experienced a consistent and accelerating decline, falling from a robust 13.58 in 2019 to -7.10 in 2023. The ratio dropped significantly each year, falling below the critical threshold of 1.0 by 2023. This negative value indicates that operational earnings are insufficient to cover interest payments, signaling a high level of solvency risk and a dependence on cash reserves or external financing to meet interest obligations.
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Fixed Charge Coverage
Newmont Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Newmont stockholders | (2,494) | (429) | 1,166) | 2,829) | 2,805) | |
| Add: Net income attributable to noncontrolling interest | 27) | 60) | (933) | (38) | 79) | |
| Less: Net income (loss) from discontinued operations | 27) | 30) | 57) | 163) | (72) | |
| Add: Income tax expense | 526) | 455) | 1,098) | 704) | 832) | |
| Add: Interest expense, net of capitalized interest | 243) | 227) | 274) | 308) | 301) | |
| Earnings before interest and tax (EBIT) | (1,725) | 283) | 1,548) | 3,640) | 4,089) | |
| Add: Operating lease cost | 23) | 28) | 21) | 21) | 22) | |
| Earnings before fixed charges and tax | (1,702) | 311) | 1,569) | 3,661) | 4,111) | |
| Interest expense, net of capitalized interest | 243) | 227) | 274) | 308) | 301) | |
| Operating lease cost | 23) | 28) | 21) | 21) | 22) | |
| Fixed charges | 266) | 255) | 295) | 329) | 323) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | -6.40 | 1.22 | 5.32 | 11.13 | 12.73 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Freeport-McMoRan Inc. | 11.69 | 12.13 | 11.86 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Materials | 8.89 | 8.68 | 8.75 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= -1,702 ÷ 266 = -6.40
2 Click competitor name to see calculations.
The financial solvency profile concerning fixed charge coverage exhibits a severe deteriorating trend over the five-year period ending December 31, 2023. While there was a strong capacity to meet obligations in the early part of the period, a substantial decline in earnings has fundamentally compromised the coverage capacity.
- Earnings before fixed charges and tax
- A consistent and accelerating decline is observed, with values dropping from US$ 4,111 million in 2019 to a deficit of US$ 1,702 million by 2023. This trajectory indicates a significant contraction in the primary earnings stream available to service fixed obligations.
- Fixed charges
- Fixed obligations remained relatively stable throughout the analyzed period, fluctuating within a narrow range between US$ 255 million and US$ 329 million. The stability of these costs confirms that the deterioration in solvency is driven by the erosion of earnings rather than an increase in fixed liabilities.
- Fixed charge coverage ratio
- The coverage ratio demonstrates a precipitous contraction, falling from 12.73 in 2019 to -6.40 in 2023. A high margin of safety was maintained through 2020, but the ratio fell sharply to 5.32 in 2021 and reached a critical level of 1.22 by 2022. The transition to a negative ratio in 2023 indicates that earnings were insufficient to cover fixed charges, signifying a total loss of coverage and a reliance on other liquidity sources to meet these commitments.
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