Freeport Beneish M Score

FCX
 Stock
  

USD 30.45  0.78  2.50%   

This module uses fundamental data of Freeport Mcmoran to approximate the value of its Beneish M Score. Freeport Mcmoran M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please check Freeport Mcmoran Piotroski F Score and Freeport Mcmoran Altman Z Score analysis.
  
Freeport Mcmoran Total Debt is fairly stable at the moment as compared to the past year. Freeport Mcmoran reported Total Debt of 9.45 Billion in 2021. Debt Current is likely to rise to about 433.6 M in 2022, whereas Issuance Repayment of Debt Securities is likely to drop (280.5 M) in 2022. Freeport Mcmoran Total Assets Per Share are fairly stable at the moment as compared to the past year. Freeport Mcmoran reported Total Assets Per Share of 32.96 in 2021. Book Value per Share is likely to rise to 9.63 in 2022, whereas Receivables Turnover is likely to drop 12.21 in 2022.
At this time, it appears that Freeport-Mcmoran is an unlikely manipulator. The earnings manipulation may begin if Freeport Mcmoran's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Freeport Mcmoran executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Freeport Mcmoran's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.91
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.11Focus
Asset QualityN/AFocus
Expense Coverage1.23Focus
Gross Margin Strengs1.09Focus
Accruals Factor1.23Focus
Depreciation Resistance0.97Focus
Net Sales Growth0.85Focus
Financial Leverage Condition1.22Focus

Freeport Mcmoran Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Freeport Mcmoran's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues19.5 B22.8 B
Fairly Down
Decreasing
Stable
Selling General and Administrative Expense403.8 M383 M
Notably Up
Decreasing
Slightly volatile
Net Cash Flow from Operations8.3 B7.7 B
Significantly Up
Decreasing
Very volatile
Depreciation Amortization and Accretion1.9 BB
Fairly Down
Increasing
Very volatile
Total Assets43.8 B48 B
Significantly Down
Increasing
Stable
Property Plant and Equipment Net28.5 B30.3 B
Notably Down
Increasing
Stable
Trade and Non Trade Receivables1.1 B1.2 B
Notably Down
Decreasing
Slightly volatile
Total Liabilities28.1 B25 B
Moderately Up
Increasing
Stable
Current Assets13.6 B14.8 B
Significantly Down
Increasing
Slightly volatile
Assets Non Current31.8 B33.2 B
Sufficiently Down
Increasing
Very volatile
Current Liabilities5.5 B5.9 B
Significantly Down
Increasing
Slightly volatile
Liabilities Non Current22.6 B19.1 B
Fairly Up
Increasing
Stable
Total Debt10.2 B9.4 B
Significantly Up
Increasing
Stable
Debt Current433.6 M372 M
Fairly Up
Increasing
Stable
Debt Non Current9.8 B9.1 B
Significantly Up
Increasing
Stable
Operating IncomeB8.4 B
Significantly Up
Decreasing
Very volatile
Gross Margin0.420.386
Significantly Up
Decreasing
Very volatile

Freeport-Mcmoran Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Freeport Mcmoran's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Freeport Mcmoran in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Freeport Mcmoran's degree of accounting gimmicks and manipulations.

About Freeport Mcmoran Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

496.76 Million

Freeport Mcmoran Operating Expenses is fairly stable at the moment as compared to the past year. Freeport Mcmoran reported Operating Expenses of 449 Million in 2021

Freeport Mcmoran Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Freeport Mcmoran. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues16.4 B18.63 B14.4 B14.2 B22.84 B19.52 B
Total Assets37.3 B42.22 B40.81 B42.14 B48.02 B43.8 B
Current Assets10.63 B10.46 B7.92 B9.3 B14.83 B13.62 B
Assets Non Current26.68 B31.75 B32.89 B32.84 B33.19 B31.77 B
Total Liabilities26.01 B24.32 B23.36 B23.48 B25 B28.14 B
Current Liabilities4.91 B3.33 B3.21 B3.42 B5.89 B5.5 B
Total Debt13.23 B11.14 B9.83 B9.71 B9.45 B10.19 B
Debt Current1.41 B17 M5 M34 M372 M433.63 M
Debt Non Current11.81 B11.12 B9.82 B9.68 B9.08 B9.82 B
Operating Income3.69 B4.75 B1.09 B2.44 B8.37 B9.03 B
Gross Margin0.270.280.0890.180.390.42

About Freeport Mcmoran Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Freeport-Mcmoran's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Freeport Mcmoran using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Freeport-Mcmoran based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. Freeport-McMoRan Inc. was incorporated in 1987 and is headquartered in Phoenix, Arizona. Freeport Mcmoran operates under Copper classification in the United States and is traded on New York Stock Exchange. It employs 24700 people.

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Please check Freeport Mcmoran Piotroski F Score and Freeport Mcmoran Altman Z Score analysis. Note that the Freeport-Mcmoran information on this page should be used as a complementary analysis to other Freeport Mcmoran's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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Is Freeport Mcmoran's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Freeport Mcmoran. If investors know Freeport will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Freeport Mcmoran listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Freeport-Mcmoran is measured differently than its book value, which is the value of Freeport that is recorded on the company's balance sheet. Investors also form their own opinion of Freeport Mcmoran's value that differs from its market value or its book value, called intrinsic value, which is Freeport Mcmoran's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Freeport Mcmoran's market value can be influenced by many factors that don't directly affect Freeport Mcmoran's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Freeport Mcmoran's value and its price as these two are different measures arrived at by different means. Investors typically determine Freeport Mcmoran value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Freeport Mcmoran's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.