Newmont Corp. (NYSE:NEM)

Debt to Equity

The debt to equity ratio remained relatively stable over the period, starting at 0.32 in 2019 and modestly declining to 0.29 for both 2020 and 2021. It then experienced a slight increase to 0.32 in 2022 and 0.33 in 2023. Including operating lease liability, the pattern follows a nearly identical trend, indicating leases have a minimal impact on this ratio.

Debt to Capital

This ratio showed a gradual downward trend from 0.24 in 2019 to 0.22 in 2021, before increasing slightly back to 0.24 in 2022 and 0.25 in 2023. When factoring in operating lease liabilities, the ratio was slightly higher in 2021 but followed the same general pattern, demonstrating a minor influence of lease obligations on capital structure.

Debt to Assets

The debt to assets ratio remained stable at 0.17 in 2019, decreased marginally to 0.16 by 2020 and maintained at that level through 2022, before returning to 0.17 in 2023. The inclusion of operating lease liabilities did not notably alter this trend, suggesting limited lease-related debt relative to total assets.

Financial Leverage

Financial leverage showed a slight decline from 1.87 in 2019 to 1.80 in 2020, followed by an increase to 1.84 in 2021. A more pronounced rise occurred in 2022, reaching 1.99, which then fell to 1.91 in 2023. This indicates a moderate increase in the use of debt financing relative to equity during the last two years, with some reversal in 2023.

Interest Coverage

Interest coverage experienced a significant downward trend over the five-year period. Beginning at a strong 13.58 in 2019, it declined to 11.82 in 2020, dropped sharply to 5.65 in 2021, and plummeted to 1.25 in 2022. The ratio turned negative at -7.1 in 2023, signaling an inability to cover interest expenses from operating earnings, which is a critical concern regarding financial health.

Fixed Charge Coverage

Similarly, fixed charge coverage mirrored the decline seen in interest coverage. From 12.73 in 2019, the ratio decreased steadily to 11.13 in 2020, dropped to 5.32 in 2021, then fell sharply to 1.22 in 2022. In 2023, the ratio also became negative at -6.4, reinforcing concerns about the company's capacity to meet fixed financial obligations.

The analysis of the financial data over the period from the end of 2019 through the end of 2023 reveals several key trends in the company's capital structure.

Total Debt

There was a gradual decline in total debt from US$6,834 million at the end of 2019 to US$6,132 million at the end of 2022, indicating a reduction in borrowings or debt repayments during this period. However, in 2023, total debt increased sharply to US$9,436 million, representing a significant change from the previous downward trend.

Total Stockholders’ Equity

Equity initially grew from US$21,420 million in 2019 to a peak of US$23,008 million in 2020, followed by a decrease in the next two years reaching US$19,354 million in 2022. Nevertheless, 2023 saw a substantial rebound, with equity rising to US$29,027 million, surpassing prior levels and indicating renewed accumulation of equity capital.

Debt to Equity Ratio

The debt to equity ratio remained relatively stable between 0.29 and 0.32 from 2019 through 2022, suggesting a consistent balance between debt and equity financing during this time frame. With the sharp increase in total debt in 2023, the ratio edged upward to 0.33, reflecting a marginally higher reliance on debt relative to equity compared to previous years.

Overall, the company demonstrated a strategy of reducing debt while maintaining steady equity levels from 2019 to 2022, followed by a contrasting approach in 2023 characterized by increased debt and a pronounced rise in equity. This shift indicates a possible change in financial policy or capital raising activities during the most recent year analyzed.

Total Debt (Including Operating Lease Liability)

Total debt showed a decreasing trend from the end of 2019 through 2022, moving from 6,909 million USD to 6,248 million USD. This represents a gradual reduction in debt over this period. However, there was a marked increase in 2023, with debt rising sharply to 9,541 million USD, indicating a significant change in the company's borrowing or lease obligations during that year.

Total Stockholders’ Equity

Stockholders’ equity initially increased from 21,420 million USD at the end of 2019 to 23,008 million USD in 2020, followed by a decline over the next two years to 19,354 million USD by year-end 2022. This suggests a reduction in net assets during that interval. In 2023, equity experienced a substantial rebound, increasing to 29,027 million USD, which may reflect profitability improvements, capital infusions, or revaluation effects.

Debt to Equity Ratio (Including Operating Lease Liability)

The debt to equity ratio remained relatively stable throughout the period, fluctuating in a narrow range between 0.29 and 0.33. The ratio was lowest in 2021 at 0.29 and increased slightly to 0.33 by 2023. Despite the large increase in total debt in 2023, the ratio's moderate rise indicates that the growth in equity mitigated the impact on leverage, maintaining a consistent level of financial leverage overall.

Total Debt

The total debt shows a decreasing trend from 2019 through 2022, declining from 6,834 million US dollars in 2019 to 6,132 million US dollars in 2022. However, there is a substantial increase in 2023 where total debt rises sharply to 9,436 million US dollars.

Total Capital

Total capital increased from 28,254 million US dollars in 2019 to a peak of 29,710 million US dollars in 2020. Subsequently, it declined to 25,486 million US dollars by 2022, followed by a marked rise to 38,463 million US dollars in 2023, indicating significant capital growth in the last year under review.

Debt to Capital Ratio

This ratio remained relatively stable over the five-year period, fluctuating narrowly between 0.22 and 0.25. The ratio slightly decreased from 0.24 in 2019 to 0.22 in 2021, then rose modestly back to 0.25 in 2023, reflecting a consistent balance between debt and total capital despite the changes in their absolute values.

Total debt (including operating lease liability)

Over the analyzed period, total debt exhibited a general downward trend from US$6,909 million at the end of 2019 to US$6,248 million by the end of 2022. However, in 2023, there was a significant increase to US$9,541 million, marking a notable reversal from the previous decline.

Total capital (including operating lease liability)

Total capital showed some fluctuation throughout the years. It increased from US$28,329 million in 2019 to a peak of US$29,818 million in 2020, followed by a reduction to US$25,602 million in 2022. Similar to the total debt, there was a marked increase in 2023, reaching US$38,568 million, which represents the highest value in the period reviewed.

Debt to capital (including operating lease liability)

This ratio remained relatively stable from 2019 through 2022, fluctuating modestly between 0.23 and 0.24. In 2023, it increased slightly to 0.25, reflecting the increase in debt relative to capital observed in that year.

Total Debt

The total debt exhibited a declining trend from 2019 to 2022, decreasing from 6,834 million US dollars in 2019 to 6,132 million US dollars in 2022. However, in 2023, total debt increased substantially, reaching 9,436 million US dollars, which not only reverses the prior decreasing pattern but also marks the highest debt level within the observed period.

Total Assets

Total assets showed a general downward trend from 2019 through 2022, decreasing from 39,974 million US dollars to 38,482 million US dollars. In 2023, there was a significant increase in total assets to 55,506 million US dollars, indicating a considerable expansion of the asset base. This increase is notably larger in magnitude compared to the preceding years' fluctuations.

Debt to Assets Ratio

The debt to assets ratio remained relatively stable between 2019 and 2023, fluctuating narrowly between 0.16 and 0.17. Despite the sharp increase in both total debt and total assets in 2023, this ratio continued to hover around the previous levels, suggesting that the increase in debt was proportionally matched by the increase in assets.

Total Debt (including operating lease liability)

The total debt exhibited a decreasing trend from 2019 through 2022, declining from 6,909 million US dollars in 2019 to 6,248 million US dollars in 2022. However, in 2023, there was a notable increase in total debt, rising sharply to 9,541 million US dollars. This suggests a cautious deleveraging approach in earlier years followed by a significant uptick in leverage in the most recent period.

Total Assets

Total assets showed a fluctuating pattern over the analyzed years. Starting at 39,974 million US dollars in 2019, assets increased slightly in 2020 to 41,369 million but then decreased steadily to 38,482 million by 2022. In 2023, total assets surged considerably to 55,506 million US dollars, indicating substantial asset growth during the last year.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio remained relatively stable across the five-year period, fluctuating between 0.16 and 0.17. Despite the significant increase in both total debt and total assets in 2023, the ratio returned to 0.17, consistent with the levels seen in 2019. This stability indicates that the increases in debt were largely proportionate to the growth in assets, maintaining a consistent leverage position relative to asset size.

Total assets

Total assets experienced a general fluctuation over the analyzed periods. Starting at 39,974 million US dollars in 2019, there was a slight increase in 2020 reaching 41,369 million US dollars. However, the asset base contracted in 2021 and 2022 to 40,564 million and 38,482 million US dollars respectively. A significant recovery and growth occurred in 2023, with total assets rising sharply to 55,506 million US dollars, representing a substantial increase compared to previous years.

Total Newmont stockholders’ equity

Stockholders’ equity demonstrated a somewhat variable trend with an initial increase from 21,420 million US dollars in 2019 to 23,008 million US dollars in 2020. This was followed by a gradual decline through 2021 and 2022, reducing to 22,022 million and 19,354 million US dollars respectively. A notable rebound took place in 2023, pushing stockholders’ equity up to 29,027 million US dollars, surpassing all prior annual figures within the scope of the analysis.

Financial leverage (ratio)

The financial leverage ratio showed relative stability, moving within a narrow range. It started at 1.87 in 2019 and declined slightly to 1.80 in 2020, before increasing again to 1.84 in 2021. The ratio peaked in 2022 at 1.99, indicating a higher reliance on debt relative to equity during that year, before moderately decreasing to 1.91 in 2023. This suggests a cautious but consistent approach to leveraging operations over the reviewed timeframe.

Overall insight

The data reflects a period of modest growth and contraction in asset base and equity until 2022, followed by a pronounced expansion in both total assets and equity in 2023. The leverage ratio fluctuations are generally mild, indicating financial strategy adjustments to balance risk and capital structure. The surge in total assets and stockholders’ equity in 2023 may suggest strategic investments, asset acquisitions, or valuation changes that significantly enhanced the company’s financial position.

Earnings before interest and tax (EBIT)

The EBIT demonstrates a marked declining trend over the period analyzed. Starting at a substantial positive value of 4,089 million US dollars in 2019, it decreased to 3,640 million in 2020, followed by a steep reduction to 1,548 million in 2021. By 2022, EBIT nearly approached break-even with a value of 283 million, and in 2023, it turned negative, registering a loss of 1,725 million US dollars. This trend indicates deteriorating operating profitability over five years.

Interest expense, net of capitalized interest

The net interest expense remained relatively stable throughout the period, fluctuating slightly between 227 million and 308 million US dollars. The highest expense occurred in 2020 at 308 million US dollars, and the lowest in 2022 at 227 million US dollars. Despite the variations, the interest expense showed no significant upward or downward long-term trend and remained within a narrow range.

Interest coverage ratio

The interest coverage ratio exhibited a consistent and significant decline over the years. It started at a strong level of 13.58 in 2019, indicating that earnings were more than sufficient to cover interest expenses. The ratio gradually decreased to 11.82 in 2020 and dropped sharply to 5.65 in 2021. By 2022, the ratio fell near unity at 1.25, suggesting very limited earnings buffer over interest costs. In 2023, the ratio turned negative to -7.1, reflecting that earnings were insufficient to cover the interest expenses, signifying increasing financial distress in terms of debt servicing capabilities.

Earnings before fixed charges and tax

The earnings before fixed charges and tax demonstrated a significant downward trend over the observed periods. Starting at 4111 million US dollars in 2019, the figure declined to 3661 million in 2020. The decline accelerated in subsequent years, falling sharply to 1569 million in 2021 and further down to 311 million in 2022. By 2023, the earnings turned negative, reaching -1702 million, indicating a substantial deterioration in operating profitability before considering fixed charges and tax obligations.

Fixed charges

Fixed charges showed a moderate decrease from 323 million in 2019 to 329 million in 2020, with a slight reduction to 295 million in 2021. The downward trend continued in 2022 to 255 million but then reversed marginally to 266 million in 2023. Overall, fixed charges remained relatively stable compared to the significant variability seen in earnings, suggesting consistent financial obligations over the five-year span.

Fixed charge coverage

The fixed charge coverage ratio experienced a marked decline across the five-year period, reflecting increasing difficulty in covering fixed charges from earnings. Starting from a strong coverage ratio of 12.73 in 2019, it decreased to 11.13 in 2020 and then more than halved to 5.32 in 2021. The ratio further declined to 1.22 in 2022, signaling near breakeven capacity to meet fixed charges. In 2023, the ratio turned negative to -6.4, indicating that earnings were insufficient to cover fixed charges, underscoring a critical liquidity and solvency concern.